1999 (1) TMI 61

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..... d in deleting the addition of Rs. 1,44,798 being the interest on borrowed funds utilised in construction of theatre. 2. The brief facts of the case are that the assessee is a firm of contractors. The construction of the theatre which the assessee commenced has not been completed even till the assessment year under consideration. The assessee, in its return of income for the year under appeal has .....

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..... for the year 1986-87, deleted the addition made by the AO. The Department is now before us, aggrieved against the order of the CIT(A) on this issue. 4. We have heard the rival submissions and perused the material on record and decision of the Supreme Court in the case of Challapalli Sugars Ltd. & Ors. vs. CIT 1974 CTR (SC) 309 : (1975) 98 ITR 167 (SC) relied upon by the learned Departmental Repr .....

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..... tion of the CIT(A). 5. Apart from the above, the fact remains that the assessee is in the process of constructing the cinema theatre with a view to derive income from it. It is also a fact that the assessee has paid the sum claimed as deduction in its return of income, as interest towards borrowed funds, which facts have not been disputed by the Revenue. Under the circumstances and taking the tot .....

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