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2019 (6) TMI 1468 - AT - Income TaxDisallowing finance charges claimed on processing of loan by assessee as business expenses - assessee is engaged in the business of building and developing of real estates - HELD THAT:- We noted from the above that the loan obtained by the assessee in regard to continuous business proposition and assessee is following the project completion method of accounting being a builder, loan taken in future project but payment made in the relevant assessment on account of processing charges of the loan is liable as business expenditure. In view of the decision of Hon’ble Bombay High Court in the case of Lokhandwala Construction Inds. Ltd. [2003 (1) TMI 93 - BOMBAY HIGH COURT] - In view of the above, we allow the claim of the assessee. Addition of undisclosed interest income - interest received on FDRs maintained with HDFC Bank Ltd. and that with ICICI Bank Ltd. - as contended that this interest income receipt was on account of funds received on account of corpus funds and society deposits from the flat purchasers - HELD THAT:- The bank deducts tax at source on the interest income earned on the fixed deposit taken from the society deposit and corpus fund account. Interest on the fixed deposits pertaining to and received on account of the assessee's own fixed deposit is duly declared and credited in the profit and loss account. However, interest pertaining to the fixed deposit invested out of society deposit and corpus fund account is credited to the said account as stated herein above and do not form part of the assessee company income. It is further pertinent to note here that the assessee company has not claimed any tax deducted at source (TDS) in respect of interest income credited to the society deposit and corpus fund account. The working in this respect and the relevant ledger account of society deposit and corpus account is also filed before us. In view of the funds not belonging to the assessee company and held by the assessee company in fiduciary capacity, the said interest income not belonging to the assessee company but belonging to and credited to the society account cannot be assessed in the hands of the assessee company. - Appeal of assessee allowed.
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