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TMI Blog2010 (8) TMI 1037X X X X Extracts X X X X X X X X Extracts X X X X ..... nsion of business. 2. That the Ld. CIT(A) has, likewise, further erred in not giving any decision on assesee s ground of addition made by AO ₹ 5,837/- being bank charges against bounced cheques. 2. At the time of hearing, the Ld. AR did not press ground no. 2 of the appeal. Hence, ground No. 2 of the appeal is rejected. 3. In respect of ground no. 1 of the appeal, relevant facts are that the assessee does business of electric and electronic items. The assessee purchased one plot of land measuring 18.05 cottahs of land to start one hotel thereon. In connection with setting up a hotel project, the assessee obtained finance facilities from State Bank of India. The State Bank of India debited bank charges, inter alia, towards sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the case of the assessee as these cases relate to allowing of deduction of interest paid u/s. 36(1)(iii) of the I. T. Act. It was also stated by the Ld. CIT(A) that the hotel project was not completed during the relevant previous year. That it was opened on 7th May, 2006 i.e. after the end of the relevant previous year. The Ld. CIT(A) has further observed that even if it was a case of disallowance of interest, the above two decisions would not be applicable in view of the amendment made by the Finance Act, 2003 by inserting a proviso to clause 36(1)(iii) to provide that no deduction would be allowed in respect of any amount of interest paid in respect of capital borrowed for acquisition of new asset for expansion of existing business for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n management, common control and the books of accounts of both the businesses are same and accordingly, the banking facilities obtained by the assessee are only for existing trading activities and, therefore, bank charges have to be allowed as revenue. Expenditure to the assessee. The Ld. AR also referred to the decision of the Hon ble Apex Court in the case of B. R. Ltd. Vs. V. P. Gupta, CIT113 ITR 647 to substantiate his above submission. He further submitted that the orders of the authorities below will be reversed and the expenditure claimed by the assessee be allowed as revenue expenditure. 8. On the other hand, the Ld.DR supported the order of the Ld. CIT(A). He submitted that the bank charges have been debited by the SBI for sanct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) relates to sanction fee and processing charges for grant of credit facilities. There is no dispute to the fact that the said hotel project was not completed in the relevant previous year. It was opened on 7th May, 2006 i.e. after the end of the relevant previous year. We are of the considered view that the setting up of the restaurant cum hotel project by the assessee is a new line of business altogether. We do not find any substance in the submission of the assessee that the setting up of the above project is an expansion of existing trading activities of the assessee. Even if there is a common management, common bank account and common books of accounts are maintained by the assesee for the existing business as well as for the new proje ..... X X X X Extracts X X X X X X X X Extracts X X X X
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