Case Law Details
DCIT Vs GNA Duraparts Ltd (ITAT Amritsar)
Facts- AO noticed that the assessee has made an addition to fixed assets of INR 53,06,14,928/- and has also taken a new term loan of INR 28,41,66,284/- from the Central Bank of India. AO made an addition of an Addition of INR 2,86,84,840/-. Further, the interest amounting to INR 51,24,000/- interest paid on the purchase of machinery is disallowed from revenue expenses and is capitalized into Machinery under installation. Additionally, the interest paid on the loan to the addition of the building under construction and for the new term loan for the building is calculated @ 15% which is Rs. 63,59,908/- also disallowed from revenue expenditure by the AO.
Conclusion- Held that order of CIT(A) sustained on the issue restricting the disallowance of non-capitalization of interest on bank loan on Plant & Machinery and on account of non-capitalization of interest expenditure on Capital Work in Progress u/s 36(1)(iii) of the Income Tax Act.
FULL TEXT OF THE ORDER OF ITAT AMRITSAR
The cross appeals are filed by the Revenue and the assessees against the order of the Commissioner of Income Tax (Appeals)-5, Ludhiana even dated 17.10.2017 in respect of assessment year 2013-14.
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