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No Section 36(1)(iii) Disallowance of Interest Based on Incorrect AO Assumption of Interest-Bearing Funds use for CWIP
Case Law Details
- Case Name
- Intas Biopharmaceuticals Ltd Vs DCIT (ITAT Ahmedabad)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2011-12
- Courts
- All ITAT, ITAT Ahmedabad
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Intas Biopharmaceuticals Ltd Vs DCIT (ITAT Ahmedabad)
No disallowance of interest u/s 36 (1)(iii) based on wrong presumption of AO that only interest-bearing funds were used for CWIP
Conclusion: Since huge interest free funds available with assessee the presumption of AO that only the interest bearing funds were utilized towards CWIP, was not correct. AO was not justified in addition of interest expenses debited in the P&L account, a sum of Rs.2,12,94,836/- was capitalized towards CWIP under Section 36(1)(iii) of and added to the total income of the assessee.
Held: AO noti...
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