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2016 (3) TMI 1468 - ITAT MUMBAIDisallowance of interest - advances granted for acquiring development rights in relation to land situated at Bhandup - interest charged @ 12% on the aggregate loan - as per AO since there is no business during the relevant previous year and the only receipt declared by the assessee is interest on debentures and assessee has advanced interest free loan to Ackruti City Ltd - HELD THAT:- We are of the considered opinion that the disallowance of interest, if any, is to be restricted to the amount of advance actually given by the assessee and should not be in reference to the expenditure incurred for the registration and stamp duty charges for registration of development agreement. We further found that since the advance was granted on 31.12.2009 as per the ‘development agreement’ therefore, the period covered during the year under consideration is only w.e.f 31.12.09 i.e. for 3 months accordingly, the AO is directed to compute the disallowance of interest only on the actual amount of advance and only for the period of three months w.e.f. 31.12.09 to 31.03.10. AO is directed accordingly.
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