Case Law Details
CIT Vs Ceebros Hotels P Ltd. (Madras High Court)
Conclusion: In the said case, the Hon’ble High Court rejected appeal of Revenue and have observed that deduction under Section 36 would be available to the assesse as the business undertaken by the assesse could not be termed as extension of its business.
Facts: In present facts of the case, the assessee was running a Hotel and Real Estate business. For the Assessment Year 2015-16, the assessee had offered income from the Real Estate in respect of the project, namely, ‘Atlantic’ at Egmore. An amount of Rs.41,37,73,978/- was claimed towards “Interest Payable” at 13.75% p.a. on a loan amount of Rs.301.92 Crores, obtained from IFCI Limited, which was outstanding as on 31.03.2015.
The AO observed that the assessee, having not commenced the project in MRC Nagar and had not offered any income from the project, all the expenditures, which are project, have to be accounted as ‘Work-in-Progress’ and only when the income is generated and offered from the project, the expenditure can be claimed. Further, the Assessing Officer observed that no income was offered from the MRC Nagar Project, therefore, any expenditure relatable to the Real Estate project ‘Atlantic’, Egmore, could be allowed for AY 2015-16, and not the expenditure related to MRC Nagar Project.
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