Assessee was engaged in business of construction and development of Group housing projects. It followed percentage project completion method for revenue recognition. It did not recognize any revenue during relevant year as it had not achieved prescribed threshold of 25 per cent of total projected construction at close of financial year, however it claimed deduction of interest on money borrowed for purchase of land as stock-in-trade.AO held that since no income had accrued, no expenses were allowable. CIT (A) allowed the claim of the assessee.\u00a0 Tribunal that since development of plot of land as a housing project to make it saleable where finished residential units would be sold to customers would take its own time and was not an instantaneous activity, in terms of AS-16, any interest cost incurred in relation to and for purchase of such plot of land would be required to be accumulated as part of project cost and could not be claimed in year of incurrence. Accordingly the order of CIT(A)\u00a0 was\u00a0 modified. \u00a0(AY. 201-15)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 36(1)(iii) : Interest on borrowed capital\u2013Stock in trade\u2013 Housing project\u2013Percentage completion method-Interest on money borrowed-Added to cost of project. [S.145, AS 16]<\/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-6982","post","type-post","status-publish","format-standard","hentry","category-digest"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-1OC","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/6982","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=6982"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/6982\/revisions"}],"predecessor-version":[{"id":6983,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/6982\/revisions\/6983"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=6982"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=6982"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=6982"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}