Dismissing the appeal of the revenue the Court held that ,Interest paid on borrowed capital which was used for acquiring or construction of assets that were used for earning taxable income. Interest expenditure is held to be allowable as deduction. ( AY.2010-11)
PCIT v. International Biotech Park Ltd. (2018) 259 Taxman 14 (Bom) (HC)
S. 36(1)(iii) :Interest on borrowed capital -loan amount was used for acquiring or construction of assets that were used for earning taxable income- Interest expenditure is allowable as deduction.