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2017 (11) TMI 327 - HC - Income TaxInterest on Secured Promissory Notes disallowed - whether the said interest was in respect of the capital borrowed for the purposes of the business of the appellant? - Held that:- As in case of this very assessee in Tax Appeal[2017 (11) TMI 63 - GUJARAT HIGH COURT] we had held in favour of the assessee as held that for the said deduction, all that was necessary was that the money i.e. capital must have been borrowed by the assessee, that it must have been borrowed for the purpose of business and lastly, that the assessee must have paid interest on the borrowed amount. All that is germane is whether the borrowing was, or was not, for the purpose of the business. It was held that the provision makes no distinction between money borrowed to acquire a capital asset or a revenue asset - Decided against revenue Disallowing expenditure pertaining to Soda Ash and Lab Front projects as revenue expenditure - Held that:- This issue is covered in favour of the assessee by virtue of judgement of this Court in case of Commissioner of Income Tax vs. Nirma Ltd. [2014 (10) TMI 396 - GUJARAT HIGH COURT] the assessee through its existing administrative mechanism started a new facility for production of soda ash and had also set up facility for production of a material called lab for its captive consumption for the purpose of its existing manufacturing business. It is no doubt that the assessee is engaged in the business of manufacture of soap and the soda ash and lab so produced is used by way of captive consumption. When such facts viewed in light of the findings of the CIT (Appeals) and the Tribunal, we have no reason to interfere with the ultimate conclusion. Had it been a case of entirely a new project undertaken by the assessee as canvassed by the counsel for the Revenue, a serious question of claiming pre-operative expenditure of interest by way of revenue expenditure would arise. - Decided in favour of assessee.
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