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2014 (1) TMI 1433 - AT - Income TaxDeletion of disallowance of Interest – Held that:- The assessee was sanctioned a term loan of Rs.600 lakhs by IDBI Bank - The last installment of this term loan was availed by the assessee on 5.3.2003 - The assessee had already capitalized an amount of Rs.28.31 lakhs out of interest during the period ending 31.3.2003 - After this term loan the assessee did not take any term loan rather it repaid a part of this term loan and the balance outstanding as on 31.3.2005 is Rs.460 lakhs - The other loans taken by the assessee were car loans, the interest on which is definitely a revenue in nature as the cars were put to use immediately - The assessee also earned cash accrual exceeding Rs.4 crores each in the preceding year and in the year under consideration as is apparent from the annual accounts placed in the file - Besides the term loan the assessee was sanctioned working capital limit from Bank of Baroda vide letter dated 30.6.2005 and balance outstanding as on 31.3.2005 on account of working capital, the interest on which cannot be said to have been incurred for making investment in capital assets –there was no infirmity of CIT(A) – Decided against Revenue.
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