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2017 (12) TMI 1045 - AT - Income TaxDeduction allowable u/s 36 (1)(iii) - non-commencement of business - Held that:- As per P&L account available the assessee is showing income on account of interest on FDs and the activity in respect of purchase of shares of various companies is not shown as purchase and closing stock in trade. Specific query was raised by the Bench and in reply it was submitted by the ld AR of the assessee that there is no stock in trade and in my considered opinion, in the facts of the present case, it cannot be said that the assessee is doing any business activity and any income is to be taxed under the head ‘income from business’. Therefore, no deduction is allowable u/s 36(1)(iii) in respect of interest paid by the assessee and claimed as allowable expenditure because as per the sec. 36(1)(iii), interest is allowable if it is incurred in respect of capital borrowed for the purpose of business. Since there is no business activity, no deduction is allowable u/s 36 (1)(iii). Disallowance of fund raising charges - contentions of the assessee were same that the same is allowable as interest expenditure u/s 36(1)(iii) because as per the provisions of sec. 2(28A) interest includes services fee or other charges in respect of money borrowed or debt incurred or in respect of any credit facility which has not been utilized - Held that:- On this issues also, the assessee is bound to fail because when it is seen and held that assessee has not commenced any business activity and no deduction is allowable u/s 36 (1) (iii) in respect of interest expenditure because it is not in respect of any business activity, the fund raising charges also cannot be allowed for the same reason. Disallowance of business expenditure - Objection of the AO that no sales and Revenue has been generated - Held that:- Business of the assessee has not been started because it was not shown that any business activity was undertaken by the assessee.
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