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2012 (10) TMI 317 - AT - Income TaxAddition on account of loss in business from sale of flats – Assessee has sold the flats at a loss – Held that:- As the figure of sales are not disputed, the opening balance on account of completed flats also is not doubted. Assessee has demonstrated that the flats were sold in this year at a price more than previous year, the loss whereof is accepted. Assessing Officer himself has allowed similar loss on sale of flats due to business exigencies. Therefore appeal decides in favour of revenue Addition on account of bank loan processing charges – Assessee has claimed the processing charges over the period for which sanction of the loan – Rollover charges also paid for re-schedulement of loans after giving credit/ incentive for early repayment of some loan - Held that:- As these charges were paid to HDFC bank for rescheduling of loans already taken, which were costly due to higher rate of interest. Therefore, treating the move of the assessee to reduce interest burden and being a business decision. The bank charges are held to be allowable expenses. Decided in favour of assessee Additions in respect of building maintenance charges, water and electricity charges – These expenses were paid by the assessee in respect of flats held as stock in trade – AO made addition that these are to be set off against the income from house property – Held that:- As ITAT has allowed similar expenditure which is referred to by CIT(A) in his earlier case . Therefore, respectfully following the same. Decided in favour of assessee Share Registrar Expenses, capital or revenue in nature – These are the routine recurring professional and services charges for maintenance of secretarial records, redressal of investors grievance, postage & communication charges . There is no issue of capital during the year by the company and hence there is no reason for treating the expenses as capital expenditure. These expenses incurred are recurring revenue expenses for the purpose of business; there allowability has also been recognized by CBDT. Decided in favour of assessee Disallowance of interest expenditure on ad-hoc basis – The AO has not disputed the fact that expenditure incurred was for the purpose of business. He has disallowed 40% of interest on ad hoc basis by holding it as of “Capital” nature - Held that:- Disallowance made was not sustainable as the projects of the company are “stock in trade” and not the capital projects. Therefore, holding the interest expenditure to be revenue/ business in nature and there is no element of payment of interest on capital account. Appeal decided in favour of assessee.
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