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2022 (1) TMI 676 - AT - Income TaxDisallowance of interest expenses under the provisions of section 36(1)(iii) - Whether the land acquired by the assessee on deferred payment basis and interest paid on the outstanding amount of purchase consideration, does the outstanding amount represent the borrowed fund? - HELD THAT:- A perusal of the above provisions reveals that the entire interest cost has to be capitalized if it was incurred in connection with the capital asset. Thus, without going into the provisions whether it relates to the expansion/extension of the business, interest cost cannot be allowed as revenue expenses in the given facts and circumstances. Accordingly, we do not find any infirmity in the order of the authorities below. Thus we uphold the same. Hence the ground of appeal of the assessee is dismissed. Rectification of mistake u/s 154 - Accrual of income - treating the unutilized MODVAT credit as income of the assessee - AO rejected the contention of the assessee by observing that the issue of MODVAT credit has been decided right up to the tribunal against the assessee and therefore there remains no mistake apparent from record - HELD THAT:- Admittedly, non-consideration of the judgment of the jurisdictional High Court amounts to a mistake apparent from record as held in the case of ACIT vs. Saurashtra Kutch Stock Exchange Ltd [2008 (9) TMI 11 - SUPREME COURT]. We are conscious to the fact that the appeal was decided by the ITAT in the case of the assessee [2010 (8) TMI 1155 - ITAT AHMEDABAD] rejecting the same in limine on the reasoning that nobody from the side of the assessee presented the case. The issue was decided by the ITAT without going into merit of the facts of the case. Whether there is a mistake apparent from record in the light of the judgment of Hon’ble Supreme Court as discussed above, it is pertinent to note that the order of the AO and the learned CIT (A) got merged with the order of the ITAT. Therefore, if any rectification is required of a mistake being apparent from record that can only be effected in the order of the tribunal and not in the order of the AO or the learned CIT (A). However the assessee, has not challenge the order of the ITAT on the reasoning that there is a mistake in the order of the ITAT. To our understanding, the order of the ITAT has reached to its finality. Accordingly we do not find reason to interfere in the order of the learned CIT (A). Hence the ground of appeal of the assessee is dismissed.
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