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2012 (9) TMI 478 - HC - Income TaxDisallowance of interest paid on borrowed loans on a pro-rata basis - ITAT allowed it - Held that:- As decided in DEPUTY COMMISSIONER OF INCOME-TAX Versus CORE HEALTH CARE LTD. [2008 (2) TMI 8 - SUPREME COURT OF INDIA] interest paid on borrowed funds has to be allowed in terms of Section 36(1)(iii)which provides that deduction should be allowed in respect of payment of interest on amounts borrowed even in respect of capital used for the purposes of business or profession - As in the present facts, there could be no dispute that the respondent-assessee was in the business of running business centers and the borrowed capital on which interest was paid was utilized for the purpose of constructing/establishing further business centers - thus the interest paid has to be allowed as deduction u/s 36(1)(iii) as in existence during the assessment year 1999-2000 as a transaction of borrowing is not the same as a transaction of investment - in favour of assessee. Disallowance of repairs and maintenance charges - ITAT allowed it - Held that:- The appellant is in the business of running business centres which are required to be kept in proper condition with appropriate ambiance. Therefore, expenses on account of repairs and maintenance is an on going process for a business such as the one run by the respondent assessee. Further, the quantum of amount spent can never be a factor by itself to conclude that the expenses are of a capital nature and not expenses on revenue account. Thus the expenses are incurred not for bringing any new asset into existence and therefore the expenditure is incurred not on capital but revenue account - in favour of assessee.
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