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2019 (6) TMI 1508 - AT - Income TaxCapitalization of expenses incurred by the assessee to earn interest income as pre-operative expenses - Non commencement of hotel business by assessee - AO observed that since the assessee has been deploying funds raised by it in short term lending operations till the time it commences business, the receipt of interest income has to be assessed under the head 'income from other sources' - HELD THAT:- As decided in own case [2018 (8) TMI 1965 - ITAT CHENNAI]Ancillary objects in the Memorandum of Association also permitted the assessee company to carry on the business of financial services. In the process the assessee company had deployed its fund towards earning interest income because during the relevant assessment year the assessee company did not commenced activities with respect to Hotel Business. Since the business of the assessee company during the relevant assessment year was only financial services, the income earned during the relevant assessment year ought to be assessed as business income and the entire expenditure incurred by the assessee for earning such income has to be allowed as deduction - Nothing on record is before us to suggest that the assessee company was indulging in any other business activity during the relevant assessment year - expenditure incurred by the assessee towards salary has also to be allowed as deduction while computing the business income of the assessee for the relevant assessment year - Decided in favour of assessee.
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