In Brief
In this income tax dispute, Rama Multi Tech Ltd. incurred ₹3,37,84,348 towards interest on loans and related expenses for setting up an industrial unit. Although initially capitalized with depreciation claimed, the assessee later sought to deduct it as revenue expenditure. The lower authorities allowed interest (₹2,92,45,670) as revenue expenditure. The Supreme Court upheld this decision, following its prior ruling in Core Health Care, holding that such expenditure can be treated as revenue expenditure. However, the Court observed that if the assessee had claimed depreciation on amounts allowed as revenue expenditure, such depreciation must be reversed. The Revenue's appeal was dismissed.
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