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2016 (5) TMI 411 - AT - Income TaxInterest incurred on acquisition of land for expansion of business - allowability of expenses - It has not been disputed that the assessee had her own capital to the extent of ₹ 3.04 crores. The assessee’s claim that the land was acquired for business purposes and shown as business asset in the Balance Sheet has not been disputed and only on assumption it has been held that it is not business purposes. In our considered view, such type of assumption cannot be sustained when in books of accounts assessee has treated the investment as business investment for future expansion. The interest incurred on acquisition of land for expansion of business is allowable as business expenditure in terms of sec. 36(1)(vii). In view of the facts, we see no justification to disallow the interest and brokerage charges paid by assessee as mentioned above which is wholly and exclusively incurred for the purpose of business and is allowable under section 36(1)(vii) besides, the assessee having own interest free funds more than ₹ 3.04 crores which is more than the investment in question. Even alternatively the assessee’s claim for interest and finance charges cannot be disallowed. - Decided in favour of assessee
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