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2023 (6) TMI 203 - ITAT MUMBAIDisallowance towards Debenture Redemption Premium paid to HDFC AMC and included in Work-in-Progress of “Aurora Project” - Whether the premium on redemption of debentures, which is akin to payment of interest is eligible for capitalization in work-in-progress? - HELD THAT:- It is not disputed by the Revenue that the loan from Central Bank of India and other group concerns were taken specifically for “Aurora Project”. The fresh loan taken for repayment of the earlier loans which were undisputedly for the purpose of business, would for all intent and purpose be considered as loan for the purpose of business to the extent they are utilized for repayment of earlier loans or infused as fresh funds for the current business of the assessee. We deem it appropriate to restore this issue back to the file of AO for the limited purpose to examine the extent of OCDs utilized for payment of the earlier loans (including loan from the bank and other group concerns) taken for the “Aurora Project”. To the extent OCDs are used for repayment of old loans taken for the purpose of assessee’s business, premium on redemption of debentures is to be allowed for capitalization in work-in-progress.
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