TMI Blog2022 (9) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... es otherwise the tests laid down by law. Similarly the case of the assessee is also supported by the decision of Bata India Ltd. [ 1993 (3) TMI 89 - CALCUTTA HIGH COURT] wherein it has been held that contributions/subscriptions towards community celebrations to keep youth in the neighborhood of the shop happy to ensure smooth conduct of the business, the expenditure can be said to be expenditure required to maintain the business as the same is incurred to keep good relation with the population in the close neighborhood and not to as sales promotion or to solicit new customers - we are inclined to set aside the order of ld CIT(A) on this issue and direct the AO to delete the disallowance. Ground no 1 is allowed. Interest on loan - Disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of Rs. 42,085/- incurred towards subscription/donation to various puja committees. 1(b) That, the Ld. CIT(A) after having observation that such expenses are incurred to keep the local community in good humour and to run business smoothly and efficiently for the purpose of business of the appellant. 2(a) That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the action of the AO in disallowing interest on loan and bank charges aggregating to Rs. 11,89,217/-. 2(b) That the Ld. CIT(A) erred in observing that before the AO the appellant has itself confirmed utilization of entire bank loan for construction of Durgapur project till 31st December, 2016. 3. That the Ld. CIT(A) ought to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als/sports association and other local organizations which has local influence. In our view these expenses are incurred by the assesse to run the business in smooth, seamless and cardial atmosphere which may not be possible otherwise. The expenditure is incurred to keep good relation in the vicinity of business. Moreover it is the assesse who shall decide the expenses to be incurred for the business and not the AO.The case of the assesse finds support from the decision of the Apex Court in the case of Sasson J. David Co. Ltd. Vs CIT 118 ITR 261(SC) wherein the Hon ble court has held it is for the assesse to decide whether any expenditure should be incurred in the course of business. Such expenditure may not be incurred voluntarily and wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Facts in brief are that the assessee has constructed and commissioned a hotel in the month of May, 2016. The AO noted during the assessment proceedings that the assessee has taken a bank loan of Rs. 467 Lakhs for the construction of the Durgapur hotel project till 31.12.2016. The assessee has incurred expenses to the tune of Rs. 1362.89 Lakhs on the construction of the hotel which have been capitalized under various heads. The AO noted that assessee has charged the sum of Rs. 32.47 Lakhs on account of interest expenses to the profit and loss account which according to AO is contrary to the statement by the assessee that the entire loan was utilized for construction of Durgapur Project till December 31, 2016. According to AO, the said inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not bring any material on record to prove that concerned assets were capitalized on 31.12.2016. (d) As per para 9 of this assessment order, the AO has clearly stated that the assessee itself confirmed the utilization of entire bank loan fund is for construction of Durgapur project till 31.12.2016. Therefore, the interest component on such loan till 31.12.2016 should have been capitalized with the fixed assets. (e) These facts clearly show that assessee itself confirmed the utilization of entire bank loan fund was for construction of Durgapur project till 31.12.2016. Now the Appellant has changed the track that this inference drawn by the AO is inaccurate and AO did not bring any material on record to prove that concerned a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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