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TMI Blog2013 (5) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... ) TMI 69 - DELHI High Court], India Cements Limited Versus Commissioner Of Income-Tax, Madras [1965 (12) TMI 22 - SUPREME Court] & Bombay Steam Navigation Co. Pvt. Ltd. v. CIT [1964 (10) TMI 12 - SUPREME Court] were misconceived as the all are altogether on different facts. In favour of revenue. Disallowance of processing charges - Held that:- They are allowable business expenditure which were incurred by the assessee during the course of business. The nature of expenses is similar to expenses as incurred in the case of India Cement Ltd. V. CIT (1965 (12) TMI 22 - SUPREME Court) as relied upon by the assessee. In favour of assessee. - I.T.A. No.334/Del/2010 - - - Dated:- 12-4-2013 - Shri U. B. S. Bedi And Shri T. S. Kapoor,JJ. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reply submitted that the land situated at IMT Manesar was allotted to the assessee in the month of November, 2003 and the same was capitalized in the month of 2004. The amount of Rs.15,19,372/- represented an opening balance of Rs.5,20,818/- current year interest of Rs.9,98,554/-. It was further submitted that opening balance was transferred from Land account to Profit loss Account along with current year's interest of Rs.9,98,554/- and in all a TOTAL OF Rs.15,19,372/- WAS DEBITED TO p l Account. Both these amounts totaling of Rs.15,19,372/- was paid to HSIDC as interest on installments of plot. It was further submitted that the possession of land was handed over in the last year itself and the amount of interest was transferred to rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inancial expenses. The Assessing Officer held that term loan was indeed disbursed in the month of March, 2005 which was meant for construction of factory building and held it to be capital in nature and was disallowed. 4. The Assessing Officer further disallowed an amount of Rs.48,250/- being processing charges charged by bank on term loan. The Assessing Officer held that the same were incurred due to term loan which was obtained for construction of factory and therefore this expenditure also needed to be capitalized as the benefit was of enduring nature and hence it was allowed. 5. Dissatisfied with the order, the assessee carried the matter to Ld CIT(A) which upheld the additions made by the Assessing Officer and therefore the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P L Account was placed. He further submitted that loan was sanctioned only at the fag end of the year and no amount can be said to have been used for the construction of building out of bank loan. In this respect he took us to page 44 of paper book wherein copy of account of State Bank of India was placed. The Ld AR invited our attention to the fact that part amount of term loan from Indian Bank was credited in the account of assessee on 4.3.2005 only. Similarly, our attention was invited to page 42 of paper book wherein copy of term loan account with Indian Bank was placed. The Ld AR invited our attention to the fact that bank had disbursed the loan of Rs.270 lakhs between 4.3.2005 to 10.3.2005. In view of the above fact, the Ld AR submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est on term loan was indeed a capital expenditure. The Ld AR in his rejoinder submitted that written submissions before Ld CIT(A) may be taken as read. 10. We have heard the rival submissions of both the parties and have gone through the material available on record. The first ground of appeal relates to interest paid by assessee on installments of loan taken for the purchase of land and second ground of appeal relates to interest paid on term loan obtained from Indian Bank for construction of factory building thereon. The dispute between the parties is regarding treatment of interest paid on above loans as to whether the same was revenue or capital in nature. Since the dispute is directly on the provisions of section 36(1)(iii) it is sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mand, the buses were not employed for more than 30 days in the previous year. The question in this case was regarding allowance of depreciation for full year and Hon'ble Delhi High Court had rightly held that buses were eligible for depreciation. However, the present case is not regarding allowance of depreciation but it is regarding allowance of interest u/s 36(1)(iii). Therefore, the facts of the case are not similar at all. 2. India Cement Ltd. v. CIT: In this case, the question answered by Hon'ble Supreme Court as to whether the amount spent towards stamp duty, registration fees, lawyer fees for creating charge on fixed assets in favour of IFCI was a capital expenditure or revenue nature which the Hon'ble Court had rightly held to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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