2009 (7) TMI 921 - AT - Income Tax

Summary

In the Appellate Tribunal ITAT COCHIN case of 2009 (7) TMI 921, the appeal was filed by the assessee for the assessment year 2004-05 against a revision order under section 263 of the Income-tax Act, 1961. The Commissioner observed that the assessment order was erroneous and prejudicial to the interest of the revenue due to the treatment of interest expenditure. The Commissioner directed to re-do the assessment, disallowing the interest expenditure and setting aside the claim of loss carry forward. The Tribunal found that the interest expenditure was justifiable, as the interest liability was crystallized during the relevant assessment year. The Tribunal also noted that the project had come to a standstill, making carry forward of losses irrelevant. Citing legal precedents, the Tribunal concluded that the original assessment order was not erroneous and allowed the appeal, vacating the revision order. Overall, the Tribunal upheld the treatment of interest expenditure and rejected the Commissioner's view that the assessment was prejudicial to revenue interests.