2015 (2) TMI 326
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....were utilized for making investment which yielded exempt income ?" [b] "Whether the Appellate tribunal is right in law in deleting the addition of Rs. 1,89,68,093/- holding it as deferred revenue expenditure claimed by the assessee ?" [c] "Whether the Appellate tribunal is right in law in deleting the dis-allowance of Rs. 7,96,250/- made on account of interest on loans given to staff ?" 2. We have heard Ms. Bhatt, learned counsel appearing for the appellant. 3. On the first question, it appears that AO disallowed the expenses mainly on the ground that for earning exempted income the interest paid cannot be allowed. The CIT (Appeals) found that the AO has failed to prove that the relevant investment is out of the interest bearing fund an....
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....an interest which was capitalized was disallowable as revenue expenditure. In appeal, CIT (Appeals) based on his own decision in respect of previous year as well as in view of the decision of this Court in case of CIT v. Core Healthcare Limited, reported in 251 ITR 61 (Gujarat), rejected the claim of revenue and held in favour of the assessee and treated as revenue expenditure. The tribunal ultimately observed at Paragraph 27 as under: - Paragraph 27: "We have heard the rival contentions and perused the material on record. The factual matrix of the case is that the assessee had treated the expenses as deferred revenue expenditure in the books of accounts but claimed as revenue expenditure while filing the return of income. CIT(A) deleted ....
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....mount outstanding. The AO has not brought any material on record to prove that the advance is not for the purpose of business. The Hon'ble Madras High Court in the case of CIT v. Hotel Savera (1998) 585, 591, 592 has held that for dis-allowance of the interest, or a part of it, paid on money borrowed for the business purposes, it is essential that a clear finding should be given by the authority concerned that the borrowed money or part of it has been utilized for non-business purposes. In the present case no such finding has been given by the AO. The finding of CIT(A) could also not be controverted by the Ld.D.R. In view of these facts, we find no reason to interfere with the order of the CIT(A). We accordingly uphold the order of CIT(....