2019 (8) TMI 1708

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....s appeal of Revenue is arising out of the order of the Commissioner of Income Tax (Appeals)]-21, Mumbai, [in short CIT(A)], in ITA No. CIT(A)-X/IT/441/2008-09, CIT(A)-21/IT/325/2009-10 dated 13.11.2009. The Assessment was framed by the Asst. Commissioner of Income Tax, Circle-10(1), Mumbai (in short ITO/ AO) for the A.Y. 2006-07 vide order dated 31.12.2008, under section 143(3) of the Income-....

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....al charges on loan taken from construction of capital assets, which are to be capitalized in the books of account and accordingly, expenditure amounting to Rs. 41,95,000/- on account of stamp duty and legal charges are capital in nature and cannot be allowed as deduction under section 37(1) of the Act. The AO also directed the assessee to capitalize the sum as and when the same is put to use.....

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....of the AO is totally perverse for the reason that from the facts it is not clear where he is noticed that these expenses were relating to loans which were taken for the construction of assets which were yet to be capitalized. Further, these amounts were reflected in the Revenue account as interest and finance charges in Schedule 12 of the balance sheet and also out of the total interest and financ....

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....eeship for MSEB Bonds to IL&FS Trust company. Photo copies of JV alongwith other relevant office notes evidencing the said payments were also enclosed." 7. We noted from the above that the assessee is able to prove that these expenses were routine expenses incurred by the assessee during the course of business for the reason that on account of these loans no capital asset has been created by incu....