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2015 (12) TMI 1224 - AT - Income TaxAddition under section 36(1)(iii) - interest paid on loan borrowed during the year under consideration - CIT(A) deleted the addition - Held that:- The proviso to sec.36(1)(iii) specifically deals with two situations first there should be acquisition of an asset and secondly such acquisition is for extension of existing business. In the instant case expenditure have been incurred for some repairs and replacement works which included replacement of flooring and lift and such replacements are for the smooth conduct of the existing business and not for the extension thereof and even otherwise that can not be construed as Extension of building because it is admitted fact that the Assessee has not constructed or added some new rooms or restaurants or some other new facility and even otherwise the Ld. A.O. has not disputed the nature of work undertaken or has made any case that any new facility has been constructed, there fore the work carried by the Assesses can not be treated as extension of existing business. Contention of Ld D.R that the work carried out by the Assessee was certainly in the nature of extension of business because the value of business and property would be increased and it amounts to capital expenditure having no essence and not tenable under the facts and circumstances as demonstrated and evident. There fore, taking all facts and circumstances into consideration, We are of the opinion that the work undertaken by the appellant does not include acquisition of an asset for the purpose of extension of its business therefore, proviso to sec.36 (1)(iii) is not applicable in this case and the addition is not justified. - Decided in favour of assessee.
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