Tribunal held that\u00a0since process of installation of towers was still going on at end of year interest on capital work-in-progress representing amount incurred on installation of new towers,\u00a0 is held to be not allowable as deduction .The contention advanced by the assessee\u00a0 a business in existence and capital is borrowed for acquisition of asset for extension of such existing business. Is also rejected . The contention thatthe investment in CWIP was made out of own interest free funds and hence no interest can be attributed to any capital borrowed for the purpose of making such an investment.\u00a0The matter was set aside for verification . It is made clear that if there is some direct borrowing for investing in CWIP, then interest paid on such borrowing has to be disallowed. If, on the other hand, there is no specific borrowing, the financing of CWIP has to be treated as out of interest free shareholders’ fund. In such a scenario, no disallowance of interest can be made as the interest free shareholders’ fund would be higher than the amount of investment in CWI.(AY.2009 -10)<\/p>\n","protected":false},"excerpt":{"rendered":"
S.36(1)(iii): Interest on borrowed capital- Work in progress- Expansion of existing business – interest on capital work-in-progress representing amount incurred on installation of new towers, is held to be not allowable as deduction .Matter was seta side to AO to verify if investment was made from interest free funds no disallowances can be made .<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1390","post","type-post","status-publish","format-standard","hentry","category-digest"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-mq","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/1390","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=1390"}],"version-history":[{"count":2,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/1390\/revisions"}],"predecessor-version":[{"id":4983,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/1390\/revisions\/4983"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=1390"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=1390"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=1390"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}