TMI Blog2013 (10) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim of the assessee towards the interest and processing charges incurred on loan. The proviso to section 36(1)(iii) cannot be applied to the facts of the present case – Decided against the Revenue. - ITA No. 187/Hyd/2011 - - - Dated:- 20-9-2013 - Shri Chandra Poojari And Smt. Asha Vijayaraghavan,JJ. For the Appellant : Sri P. Murali Mohan Rao For the Respondent : Sri S. Ramu ORDER Per Chandra Poojari, AM:- This appeal by the Revenue is directed against the order of the CIT(A)-V, Hyderabad dated 29.11.2010 for assessment year 2007-08. 2. The Revenue raised the following grounds of appeal: 1. The learned CIT(A) erred in holding that interest has to be treated as revenue expenditure even though the land purchased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charges incurred at Rs. 7,56,500 on the loan obtained from HDFC Bank for the purpose of purchase of land is also treated as capital expenditure and disallowed. On appeal, the CIT(A) observing interest incurred by the assessee on loan borrowed from HDFC Bank cannot be capitalised as it is not part of the price paid for purchase of land/capital asset. Similarly, processing charges paid for availing the loan are to be considered as revenue expenditure and it cannot be capitalised. Against this finding of the CIT(A), the Revenue is in appeal before us. 6. The learned DR submitted that the assessee obtained loan from HDFC Bank which was utilised for the purpose of purchase of land situated at Survey Nos. 386/A, 387/A, 386/A/1, 386/A/4 and 423/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee- company, M/s. Nivee Property Developers (P) Ltd., had taken following loans for its business requirements: (a) For the construction of residential projects at Banjara Hills, Madhapur, Miyapur for an amount of Rs. 7.50 crores on 25th July 2005 from HDFC Limited and (b) For the construction of residential projects at Nallagandla, Tellapur for an amount of Rs. 25.00 crores on 30th May 2006 from HDFC Limited. 8. He drew our attention to the copies of sanction letters from HDFC Ltd., for the above two loans which are placed on record. The loans were taken for the purpose of working capital of the business of the company and the same were repaid by the assessee company as under: (a) The loan from the HDFC limited for the amount of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction thereon present and future. Further, there was a mortgage of land admeasuring 2000 sq. yd. Situated at Miyapur, Sy. Nos. 61, 64, 65 66, Hyderabad along with the construction thereon present and future. There was another mortgage of land admeasuring 1931.54 sq. yd. Situated at Plot No. 10, Sector-1, Huda Techno Enclave Sy. No. 64, Madhapur, Hyderabad along with the construction thereon present and future. Another mortgage of land admeasuring 6050 sq. yd. situated at Plot No. 32A, Industrial Development Area, Jeedimetla, Hyderabad, along with the present future. There was a pledge of share of Vijay Bank 20000 Nos. in Demat form in the name of M/s. Nivee Investments Finance Ltd., Hyderabad, personal guarantees from Mr. Sujit Reddy an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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