TaxTMI 
TaxTMI 
2019 (4) TMI 509
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.... 1961 (hereinafter referred to as "the Act") dated 22/03/2013 and 20/03/2014 relevant to Assessment Years (AYs) 2010-11 & 2011-12 respectively. 2. The grounds of appeal raised by the Assessee read as under:- 1. In law and in the facts and circumstances of the appellant's case, the learned CIT(A)has grossly erred in sustaining disallowance of interest expense to the extent of Rs. 93,88,884 (out of disallowance of Rs. 2,53,26,078 made in the assessment order impugned before him). 2. In view and in the facts and circumstances of the appellant's case, the learned CIT(A) has grossly erred in altogether omitting to consider Grounds No.3 and 4 of the appellant's appeal before him reading as under: "3. On the facts and in the circumstances o....
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.... not justified. Further, the addition to total asset includes addition of Rs. 2,02,090/- to furniture and fixture which cannot be considered for capitalization of interest expenditure u/s.36(1)(iii). Thus, capitalization of interest expenditure u/s.36(1)(iii) is restricted on addition to capital WIP of Rs. 16,47,56,851/-. Further, the fact that the assessee has taken loan of Rs. 25 crore from Yes Bank on 23/10/2009 and paid interest of Rs. 1,42,46,575/- on such loan. The disallowance of proportionate interest expenses on Capital WIP of Rs. 16,47,56,851/- is restricted from the date of sanction of loan to the balance sheet date as against the disallowance made for the whole year while passing assessment order. Thus capitalization of interes....
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....iii) emphasizes is the user of the capital and not the user of the asset which case into existence as a result of borrowed capital. The legislature has, therefore. made no distinction in section 36(1)(iii) between "capital borrowed for a revenue purpose" and "capital borrowed for a capital purpose". An assessee is entitled to claim on borrowed capital provided that capital is used for business irrespective of what may be the result of using the capital which the assessee has borrowed. Further, the words "actual cost" do not find place in section 36(1)(iii) of the Act. 7. In the matter of Vardhaman Polytec Ltd. vs. CIT (1979) 118 ITR 200 (SC). The Hon'ble Supreme Court has held that we need to see nexus between the advancing of funds and bu....
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....1,62,174 (out of disallowance of Rs. 2,70,79,651 made in the assessment order impugned before him) made in pursuance of the Proviso to Section 36(1)9iii) of the Income-tax Act, 1961. He ought to have appreciated, inter alia, that the said Proviso could be invoked only where the acquisition of asset/s was made for the purpose of extension of e4xisting business which was not the case with the appellant. 3. In law and in the facts and circumstances of the appellant's case, the learned CIT(A) has grossly erred in dismissing Ground No.7 of the appellant's appeal before him challenging the initiation of penalty proceedings u/s.271(1)(c), as premature. He ought to have appreciated, inter alia, that in the peculiar facts and circumstances of the ....