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TMI Blog2023 (6) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... Redemption Premium paid to HDFC Asset Management Company Ltd. (In short "HDFC AMC") and included in Work-in-Progress of "Aurora Project" 3. Shri Kumar Kale appearing on behalf of the assessee submitted that the assessee is engaged in the business of real estate development. The assessee filed its return of income for the impugned assessment year declaring 'Nil' income. The ld. Authorized Representative for the assessee submits that the assessee was developing a housing project by the name, "Aurora Project". The assessee had taken loan for the said project from Central Bank of India and other group companies. The assessee issued 13 lac Optionally Convertible Debentures (OCDs) of Rs.1000/- each to HDFC AMC in financial year 2009-10. During t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the Assessing Officer noted that the debentures were issued to HDFC AMC in 2009, whereas project was stalled in the beginning of Financial Year 2005-06. therefore, funds obtained from HDFC AMC through issue of debentures were not used for the purpose of "Aurora Project", hence, the redemption premium paid thereon is not attributable to the project. Consequently, the redemption premium of Rs.1,30,00,00,000/- was not allowed to be capitalized in work-in-progress. The ld. Authorized Representative for the assessee submits that the Assessing Officer has erred in not taking into consideration that the OCDs were utilized for repayment of loans specifically taken for "Aurora Project". The amount collected from issue of OCDs was utilized for rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of OCDs was utilized by the assessee purportedly for repayment of term loan from Central Bank of India and other group concerns. 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. Taking into consideration entire facts of the case, we deem it appropriate to restore this issue back to the file of Assessing Officer for the limited p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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