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2016 (11) TMI 1368 - HC - Income TaxEntitlement to set off interest finance and professional and other charges from the interest income for the next assessment year - prior period expenditure - Held that:- The note appended to the computation of income file along with the return by the assessee in this case clearly stated that interest and legal charges were excluded on the basis of the Income Tax Department’s stand in other group cases that they could be included in the case of land and were done by way of “abundant caution” as a disallowance. Having regard to this circumstance and further the fact that other group company cases i.e. Kum Kum Cultivation involved a similar and identical exercise where ultimately the disallowance was set aside by the ITAT, the adoption of the same course of action in this case cannot be said to have been erroneous. Furthermore, in the eventuality of the transaction itself maturing the likelihood of the assessee being permitted to capitalize or include the interest component as part of the cost of land has not been disputed. If such is correct course of action, the reverse situation whereby the transaction does not mature, should also attract a similar treatment that the interest paid but not shown as deductible expenditure for the previous period should be permitted as prior period expenditure. - Decided in favour of the assessee
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