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2020 (8) TMI 438 - ITAT DELHICommencement of business operation or not - whether set up of business is only set up or is also commencement of business? - Interest expenditure allowance - HELD THAT:- The present assessment was made in the hands of the assessee, following the same reasoning as in Assessment Year 2006-07 [2020 (6) TMI 569 - ITAT DELHI]both by the Assessing Officer and the CIT(A), since the issues have already been decided by the Tribunal in earlier year in assessee’s own case, we hold that as the business of the assessee had already commenced in Assessment Year 2006-07, then the interest expenditure and all other expenses both administrative and other expenses are to be allowed as business expenditure. The interest income is to be taxed as business income and the interest expenditure is to be set off against the said business income. During the year under consideration, the assessee had capitalized interest expenditure of ₹ 40.78 Corers, hence, there is no issue of its allowability. Coming to the submissions of the Ld. DR for the Revenue, we find that the interest expenditure of ₹ 18.64 Crores is business expenditure and the same needs to be allowed as expenditure in the hands of the assessee, hence, we hold so. The grounds of appeal raised by the assessee in this year are thus allowed. Facts and issues raised in appeal of the assessee relating to Assessment Year 2008-09 are similar to the facts and issues in Assessment Year 2007-08 and our decision in Assessment Year 2007-08 shall apply mutatis mutandis. The interest expenditure in the respective year which has been capitalized by the assessee and not claimed as business expenditure, hence, the only portion claimed in the hands of the assessee is to be allowed as business expenditure. Accordingly, grounds of appeal raised by the assessee stands allowed.
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