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2019 (8) TMI 405 - AT - Income TaxAddition on account of interest expense capitalized in real estate under development - interest free advance given to subsidiary - CIT(A) has deleted this addition on the basis of SA Builders Ltd. [2006 (12) TMI 82 - SUPREME COURT] - HELD THAT:- CIT(A) has rightly allowed this issue with a detailed finding as well as by discussing the case laws referred by the Assessing Officer - views of the AO appear to be reverted and distorted. The appellant company and its parent company are into different businesses like appellant company doing real estate work and parent company is India Bulls Real Estate Ltd., a real estate company. Both the interest of the company are to earn profits but within the framework of corporate law and other allied laws. Therefore, do not support the view of AO and advice AO to always apply fresh case laws of recent years as appearing in last 5 to 10 years by different High Courts and Supreme Court. With the change of time and advancement of science and technology and development of the country, the situation in which company run their business also differs. Therefore as officers of the department, we should be more practical and pragmatic while making assessment of the companies. Having concluded that the interest paid by the assessee is duly allowable under Income Tax Act as the loan to the subsidiaries has been given for the purpose of its business, it is also directed that the disallowance of the interest cost - Decided against revenue Addition of all expenditure debited to profit and loss account - alleged non commencement of business - payment of brokerage and commission for booking of flats - HELD THAT:- AO ignored the crucial fact that there is payment of brokerage and commission for booking of flats to different brokers and in the next AY 2011-12, the assessee had shown total income of ₹ 209.92 crs. on which paid taxes of ₹ 75.41 crs. Thus, we are in the 4th year of business of the assessee company but the Assessing Officer wrongly mentioned that the assessee did not started its business on AY 2010-11 (4th year of filing return).Thus, the CIT(A) has rightly deleted this addition - Decided against revenue
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