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2022 (9) TMI 187 - ITAT KOLKATAExpenses incurred by way of subscription/donation to various puja committees - Expenditure not allowable u/s 37(1) - HELD THAT:- Expenditure may not be incurred voluntarily and without any necessity and if it is incurred for promoting the business and to earn profits the assessee can claim the deductions u/s 10(2)(xv) of the Income Tax Act 1922( now section 37(1) of Act 1961) even though there was no compelling necessity to incur the expenses. The fact that somebody other than the assesse is also benefitted by the expenditure should not come in the way of an expenditure being allowed by way of deduction under the Act if it satisfies otherwise the tests laid down by law.”Similarly the case of the assessee is also supported by the decision of Bata India Ltd. [1993 (3) TMI 89 - CALCUTTA HIGH COURT] wherein it has been held that contributions/subscriptions towards community celebrations to keep youth in the neighborhood of the shop happy to ensure smooth conduct of the business, the expenditure can be said to be expenditure required to maintain the business as the same is incurred to keep good relation with the population in the close neighborhood and not to as sales promotion or to solicit new customers - we are inclined to set aside the order of ld CIT(A) on this issue and direct the AO to delete the disallowance. Ground no 1 is allowed. Interest on loan - Disallowance on the ground that the same pertains to pre-commencement period of the hotels - HELD THAT:- Durgapur Hotel Project was completed and commissioned by the assessee on 16.05.2016 and the assessee has apportioned interest and other bank charges between two periods) relating to pre-commissioning period of 01.04.2016 to 16.05.2016 and ii) post commissioning from 16.05.2016 to 31.03.2017. We note that the interest expenses and other charges pertaining to period prior to the completion of project were capitalized under various heads of fixed assets as it is apparent from annual accounts and also the basis of capitalization interest on loan - In view of these facts, we are not in concurrence with the order of Ld. CIT(A) and accordingly we set aside the same and direct the AO to delete the addition - Decided in favour of assessee.
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