Held, that admittedly, the assessee had capitallised the interest of Rs.2.48 crores out of the total interest paid during the year at Rs. 11.98 crores. The assessee had brought forward the interest of Rs. 83.57 lakhs in its pre-operative expenses account pending allocation. Thus the total interest of Rs. 3.32 crores had been transferred by the assessee to pre-operative expenses and the total pre-operative expenses had been allocated to fixed assets. Accordingly the amount of Rs. 7.44 crores had been allocated to the building account out of the pre-operative expenses of Rs. 14.79 crores. The Assessing Officer had ignored the facts produced by the assessee and had disallowed interest of Rs.\u20021.38 crores out of the total interest, invoking the provisions of section\u00a036(1(iii)\u00a0of the Act which amounted to double disallowance. Once the assessee had transferred the interest to pre-operative expenses the disallowance was not sustainable in law. (AY 2010-2011)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 36(1)(iii) : Interest on borrowed capital\u2014Part of interest capitallised and transferred to pre-operative expenses\u2014 Disallowance again on interest amounts to double deduction \u2014 Addition to be deleted.<\/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-7476","post","type-post","status-publish","format-standard","hentry","category-digest"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-1WA","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/7476","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=7476"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/7476\/revisions"}],"predecessor-version":[{"id":7477,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/7476\/revisions\/7477"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=7476"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=7476"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=7476"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}