The assessee, engaged in the real estate business, claimed a deduction of interest on overdraft account. The Revenue disallowed the interest and also included the entire interest in closing WIP in the books.<\/p>\n
Held that such an addition made to the closing WIP and simultaneously disallowing interest expense is not sustainable and accordingly addition was set aside. The decision in assessee\u2019s own case followed which also elaborates the treatment under AS 2-Inventories<\/em> that generally the interest shall not be added to the inventories as the same does not usually bring the inventories to the present location and condition.Further, the assessee transferred the funds borrowed to certain sister concerns. The proportionate interest pertaining to such transferred funds was disallowed.\u00a0 Held that when the said interest was recovered by the assessee from sister concerns, such a disallowance was not sustainable in law.\u00a0 (AY. 2013-14)<\/p>\n","protected":false},"excerpt":{"rendered":" S. 36(1)(iii) : Interest on borrowed capital-Amount advanced to sister concern-Interest recovered-Disallowance of interest is not justified. <\/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":[21],"tags":[],"class_list":["post-35799","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-9jp","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/35799","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=35799"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/35799\/revisions"}],"predecessor-version":[{"id":35800,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/35799\/revisions\/35800"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=35799"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=35799"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=35799"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}