Interest on funds borrowed for business project is allowable u/s 36(1)(iii)

Keystone Realtors Pvt. Ltd. Vs DCIT (ITAT Mumbai) ITAT Mumbai held that the interest paid on such borrowing is allowable under section 36(1)(iii) of the Income Tax Act as the funds were borrowed for the purpose of construction project. Facts- During the year, the assessee incurred finance cost of Rs. 108,75,77,612 out of which Rs. 6,69,81,882 was allocated to those contracts of which construction has been completed and the balance interest of Rs. 102,05,95,730 was debited to the profit and loss account and not capitalised to work in progress (‘WIP’). During the course of assessment pro...