ITAT directs Re adjudication on Deduction claiming Interest paid to Maharashtra State Cooperative Bank u/s 37(1) of Income Tax Act [Read Order]

The Income Tax Appellate Tribunal ( ITAT ), Pune bench directed readjudication on deduction claiming the interest paid to Maharashtra State Cooperative Bank under Section 37(1) of the Income Tax Act, 1961.

The Assessee Tokai Sahakari Sakhar Karkhana Ltd after filing the return of income, during the assessment proceedings the AO denied the interest deduction of Rs.38,13,100/- paid to The Maharashtra State Cooperative Bank under section 37(1) of the Income Tax Act.

Aggrieved  assessee filed appeal before the CIT(A) who dismissed the appeal. Accordingly the assessee filed a second appeal before the tribunal.

Counsel for the assessee submitted that assessee has commenced its sugar production in the relevant previous year only and therefore not covered under section 36(1))(iii)(Proviso) as held as capital expenditure in the preceding assessment years.

M.G.Jasnani, Counsel for revenue supported the order of lower authorities.

After analyzing the submission of both parties the bench comprising S.S.Godara (Judicial Member) and G.D.Padmahshali, (Accountant Member) directed readjudication on deduction claiming the interest paid to Maharashtra State Cooperative Bank under Section 37(1) of the Income Tax Act.

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