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2020 (4) TMI 27 - AT - Income TaxNature of interest expenditure - ‘ongoing projects’ - interest expenses claimed as deduction while computing income of the impugned assessment year - assessee is doing a real estate activity of constructing flat for further sales /renting etc. as business activity - HELD THAT:- When assessee is engaged in real estate business and is constructing flats which are meant for the purpose of sale/renting purposes as a business, the interest expenses incurred on borrowings are towards revenue field and was correctly charged to Profit and Loss Account as time cost and claimed as deduction while computing income of the assessee. The assessee in the instant case in not building a capital asset rather assessee is doing a real estate activity of constructing flat for further sales /renting etc. as business activity and these ongoing projects are at different stages of completion. In our considered view, the assessee has rightly claimed interest expenses as deduction while computing income of the impugned assessment year. In any case, these interest expenses are tax neutral and even if it is added/capitalized to the inventory being unsold stock under construction as contemplated by Revenue, then also the same is to be allowed as expenses in subsequent years when Revenue is recognized from such unsold inventory - we allow appeal of the assessee
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