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2021 (7) TMI 113 - HC - Income TaxDisallowance of interest on capital as attributable to capital work-in-progress relying on the proviso to Section 36(1)(iii) - as argued when the said proviso was inapplicable to the case of the appellant and no part of the borrowed capital was utilized for investment in work in progress in any event? - HELD THAT:- As decided in assessee's own case [2021 (3) TMI 1030 - KARNATAKA HIGH COURT]. The word ‘expansion’ and ‘extension’ connote different meaning and legislature in its wisdom has used the terms differently under various provisions of the Act itself and therefore, the words cannot be used synonymously. In this connection reference may be made to Section 80- IC(2)(b) and Section 80-IE(2)(ii) where the expression ‘expansion’ is used and ‘substantial expansion’ is defined as increase in investment in plant and machinery by a specified percentage of book value of plant and machinery. In Section 35D(1)(ii) and proviso to Section 36(1)(iii) (prior to its amendment in the year 2015), the legislature has employed the expression ‘extension’. Therefore, prior to its amendment the extension of business was covered under Section 36(1)(iii) of the Act and not the expansion of business. In the instant case, the assesee has set up new coffee shops, which amounts to expansion of business and therefore, the bar under the proviso Section 36(1)(iii) is not applicable. It is only after the amendment of Section 36(1)(iii) with effect from 01.04.2016 the proviso can be attracted to the case of expansion of business which is not applicable to the facts of the case as the case of the assessee pertains to Assessment Year 2010-11. Decided in favour of the assessee
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