TaxTMI 
TaxTMI 
2003 (1) TMI 93
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....gs. As stated above, we are concerned with the assessment year 198788. The assessee followed the mercantile system of accounting. The assessee followed a modified project completion method for computing its profits. The assessee had secured development rights from Bombay Gaw Rakshak Mandal under an agreement dated December 13, 1984, in respect of a plot of land situate at Kandivali admeasuring 7,88,000 sq. mts. for a total consideration of Rs. 11 crores or Rs. 50 per sq. ft. of FSI that may be sanctioned by BMC. A sum of Rs. 1.10 crores was paid by the assessee to the transferor. Till the end of the accounting period relevant to the assessment year 1987-88, the conveyance was not executed and, therefore, survey fees, professional fees, etc.....
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....ed March 29, 1990. Being aggrieved, the Department has come by way of appeal to this court under section 260A of the Income-tax Act. On the above facts, the following question of law arises for our determination: "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the interest claimed as revenue expenditure amounting to Rs. 14,09,942 cannot be treated as capital expenditure and added to work-in-progress in spite of the fact that other expenses on project were being capitalised by the assessee itself and holding that the Commissioner of Income-tax was wrong in directing the Assessing Officer to disallow the said interest and treat the same as capital expenditure as a part of work-in....
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....an was obtained. In the present case, the assessee was a builder. In the present case, the assessee had undertaken the project of construction of flats under the Kandivali project. Therefore, the loan was for obtaining stock-in-trade. That, the Kandivali project constituted the stock-in-trade of the assessee. That the project did not constitute a fixed asset of the assessee. In this case, we are concerned with deduction under section 36(1)(iii). Since the assessee had received loan for obtaining stock-in-trade (Kandivali project), the assessee was entitled to deduction under section 36(1)(iii) of the Act. That, while adjudicating the claim for deduction under section 36(1)(iii) of the Act, the nature of the expense--whether the expense was ....