Non-admission of additional evidence by CIT(A) was improper as ...

Non-admission of evidence improper. LPSC not taxable income. Interest capitalization partly upheld. Notional interest deduction allowed.

Case Laws     Income Tax

August 22, 2024

Non-admission of additional evidence by CIT(A) was improper as the evidence went to the root of the matter. Late payment surcharge (LPSC) cannot be taxed as income due to lack of certainty of realization based on accounting standards and Supreme Court precedent. Disallowance of interest capitalization u/s 36(1)(iii) was partly upheld for direct asset purchases, remanded for Bamnauli project verification. Deduction u/s 80IA(4)(iv) for notional interest was allowed as eligible profit determination was proper. Foreign exchange loss on capital assets was allowed as liability reinstatement and future settlement accounting were valid. Depreciation disallowance was remitted back to AO for verification of working, asset put-to-use dates, and allowance as per law after providing opportunity of hearing.

View Source