2013 (10) TMI 967

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....ed is shown as fixed asset and not put to use. 2. The learned CIT(A) erred in holding that processing charges are to be allowed as revenue expenditure. 3. Brief facts of the case are that the assessee is engaged in business of real estate, technical consultancy and advisers for construction. For the A.Y. 2007-08, the assessee filed its return of income on 13.9.2007 declaring income of Rs. 99,04,050. The Assessing Officer completed the assessment u/s. 143(3) of Income-tax Act, 1961 determining the total income at Rs. 3,25,39,481. The Assessing Officer while determining this income made the following reasons: (a) Disallowance of expenditure on account of interest - Rs. 2,18,78,331 (b) Disallowance of expenditure on term loan proce....

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.... and 423/E/1 and 423/AA, Tellapur village, Ramachandra Puram Mandal, near Hyderabad and which has been shown as fixed asset in Schedule VI of the Balance Sheet. Being so, the interest on borrowings used for the purpose of acquisition of fixed asset is to be considered as cost of fixed assets in view of the insertion of the proviso to section 36(1)(iii) of the Act w.e.f. 1.4.2004. Regarding the disallowance of processing charges on the loan taken, he submitted th same arguments. 7. The learned AR submitted that the assessee company, M/s. Nivee Property Developers (P) Ltd., is engaged in the business of construction and development of buildings and residential apartments. During the year under consideration, the assessee company had filed ....

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.... amount of Rs. 7.50 Crores was repaid by end of September 2007 as evident by no due certificate issued by HDFC Limited. (b) The loan from the HDFC Limited for the amount of Rs. 25.00 Crores was repaid by August 2009 as evident by no due certificate issued by HDFC Limited. 9. The AR further submitted that the assessee-company had repaid the above said loans from its business proceedings and the company had following sales turnover and profit for the financial year 2006-07, 2007-08, 2008-09 & 2009-10. Financial year Total Turnover 2006-07 13,56,24,641 2007-08 19,75,11,886 2008-09 17,80,91,646 2009-10 5,24,24,784 10. We have heard both the parties and perused the material on record. In this case, the asse....