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2016 (12) TMI 867 - AT - Income TaxDisallowance of advance site expenses - Held that:- We are of the view that the assessee is under obligation to provide the underlying documents and details for claim of expenditure if so required by the Revenue. Admittedly, the assessee has failed to produce all the documentary evidences to support the expenditure claimed on the ground that such bills/vouchers are purportedly voluminous. In the circumstances, in the absence of complete details, we do not find any plausible reason to discredit the findings of the CIT(A) in this regard. - Decided against assessee. Disallowance of interest expenditure - Held that:- While in view of the proviso to sub-section (iii) of section 36(1) of the Act, we find force in the alternate contention of the Assessee that interest attributable to the investment in new assets is required to be capitalized till the date the new assets is put to use, the rate of interest attributable to such advances is required to be applied @ 3%p.a. instead of 14% p.a. as per AO. The AO is accordingly directed to grant appropriate relief by computing the revised disallowance applying the rate at which the unsecured loans has been borrowed by the assessee. The AO may seek required details in this regard if he so considers it expedient.- Decided partly in favour of assessee. Disallowance of interest expenditure attributable to construction of the new building - Held that:- In view of the fact that unsecured loans of ₹ 6.65 crores bearing interest 3% p.a. is available with the assessee as claimed the benefit of low rate of interest as claimed by the assessee for the purpose of capitalization of interest costs in terms of section 36(1)(iii) of the Act cannot be denied. We therefore find force in the argument of the assessee. The AO is accordingly directed to apply the interest rate at which unsecured loan has been borrowed for the purpose of capitalization of interest cost in terms of section 36(1)(iii) of the Act. For this purpose, the AO would be entitled to may seek requisite information from the assessee. - Decided in favour of assessee.
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