2020 (10) TMI 1392

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..... cision instead of assisting the assessee's case, would assist the case of the Revenue. Tribunal held that the Reset Fee is only in the nature of interest defined under Section 2(28A) of the Act to include any service fee or charge in respect of monies borrowed or debt incurred. Tribunal also took note of the provision of Section 36(1)(iii) of the Act as noted by the Assessing Officer and held that the same would stand to be a part of the core cost of the capital asset towards acquiring which the borrowing stands applied, the interest being incurred during the construction period. Tribunal had applied the decision of Core Health Care Limited [ 2008 (2) TMI 8 - SUPREME COURT ] - We find that the reasons assigned by the Tribunal are perfec .....

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..... arges is in the nature of interest incurred during the construction period would form part of the capital asset to be capitalised as per proviso to Section 36(1)(ii) of the Act, without appreciating that the expenditure in question was not incurred in raising a debt but incurred for extinguishment/liquidation of borrowings? 2. We have heard Mr. R. Vijayaraghavan, learned counsel for the appellant / assessee and Mr. T. Ravikumar, learned Senior Standing counsel and M/s. R. Hemalatha, learned Senior Standing counsel appearing for the respondent / Revenue. 3. The assessee is in the business of Crude Oil Refining and Manufacturing of Petroleum Products. For the Assessment Year under consideration AY 2004-05, the assessee filed his Return of Inc .....

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..... did not agree with the said stand, referred to the proviso in Section 36(1)(iii) of the Act and capitalized the amount and due depreciation was allowed. The assessee carried the matter by way of an appeal before the Commissioner of Income Tax(Appeals) (Large tax payers Unit) ['CIT(A)' for brevity], Chennai. By order dated 14.09.2011, the appeal was dismissed, holding that there is no dispute that the amount has been paid by the assessee only for the monies borrowed by it and hence, the same would come under the ambit of interest. The assessee being aggrieved by such order, preferred an appeal before the Tribunal. The assessee filed appeal, which has been dismissed by the Tribunal. 5. The assessee placed reliance on the decision of .....

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