Supreme Court held that, Deduction u/s. 36 (1) (iii) is allowable on interest paid on borrowed funds on mere extension of existing business

Summary: Assessee had set up a sugar plant at various places out of borrowed funds - There was a unity of control and management and there was also intermingling of funds - 

Issue: Whether deduction shall be allowed on interest paid on borrowed funds on mere extension of existing business of ferro-alloys plant? 

Held: Allowable deduction under section 36(1)(iii) of the Income Tax Act, 1961

IN THE SUPREME COURT OF INDIA

Commissioner of Income tax

vs.

Monnet Industries Ltd.

S.H. KAPADIA, CJ.

AND MADAN B. LOKUR, J.

CIVIL APPEAL NOS. 21391 OF 2009 AND 6163 OF 2012

AUGUST 29, 2012

ORDER

Heard learned counsel on both sides.

Leave granted.

The civil appeal filed by the Department is dismissed.

No order as to costs.

ORDER

Heard learned counsel on both sides.

Leave granted.

In view of the concurrent findings recorded by the Courts below, this civil appeal filed by the Department is dismissed.

No order as to costs.

...xxx...