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2010 (5) TMI 656 - AT - Income TaxWhether Commissioner of Income-tax (Appeals) has erred in law in holding that the interest paid by the appellant is capital expenditure and erred in law in holding that the legal expenses are capital expenditure – Held that:- interest on borrowed funds and legal and professional charges are incurred in relation to a project which is yet to be completed and other expenditure are being grouped under work-in-progress. these two expenses incurred by the assessee on account of interest on borrowed funds and legal and professional charges, should also be grouped under work-in-progress. As a result, the value of the closing stock of work-in-progress will go up. The assessee will not get any deduction on account of these two expenses in the present year. order of the learned Commissioner of Income-tax (Appeals) is modified. appeal of the assessee is partly allowed for statistical purposes
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