Disallowance of interest on loan on Plant & Machinery and Capital WIP by capitalizing it is unsustainable

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

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