1999 (2) TMI 2 - SC - Income Tax

Even though the machinery has not been actually used in the business at the time when the assessment was made, the same had been treated as a business asset and it was purchased only for the purposes of the business - Tribunal is justified in law in holding that the interest paid by the assessee on loans taken from the bank for the purchase of machinery, which was never used in the assessee s business, is an allowable deduction in computing the total income of the assessee

Summary

The Supreme Court upheld the Tribunal's decision that interest paid on loans for machinery, even if not used in business at the time of assessment, is a deductible amount. The appeal was dismissed with no order as to costs.