2008 (11) TMI 71

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....red by ADARSH KUMAR GOEL J. - The revenue has preferred this appeal under Section 260A ofthe Income Tax Act, 1961 (the Act) against the order of the Income TaxAppellate Tribunal, Chandigarh Bench 'A', Chandigarh, passed in I.T.A.No. 974/Chandi/2004 dated 10.11.2005 for the Assessment Year 2001-02proposing to raise the following substantial questions of law:- "(i) Whether on the facts and law....

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....he Assessing Officer also disallowed interest amount of Rs.1,66,229/- to persons covered under Section 40A(2)(b) of the Act on the ground that the same was excessive. 3. The Commissioner Income-tax(Appeals) allowed the claim of the assessee which order has been confirmed by the Tribunal. 4. The Tribunal held:- "The Assessing Officer, however, failed to take into consideration that the afo....

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....come-tax Act, borrowing on capital or revenue account is not relevant. Where the capital was borrowed for purchase of machinery to increase production in the existing business but the machinery was not put to use in the accounting year such fact was not relevant and the interest on borrowed capital was held deductible. It was held that the assessee was under no obligation to capitalize such intere....

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....atter of record that for the immediately preceding year, interest @ 18% paid to the partners stands allowed by the Assessing Officer. Moreover, it can not be again said, as held by the Hon'ble Madras High Court in the case of CIT v. Raman & Raman Ltd., [1969] 71 ITR 345 (Mad.), as rightly followed by the ld. Commissioner Income-tax(Appeals), that while allowing a particular expenditure, the revenu....