ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, KOTA V. M/S CAREER POINT INFRA LTD., KOTA

ITA 720/JPR/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9102 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 17-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RUNI PAUL
• Keywords: Business income
• Section: 143(3); 14A; 251; 22; 147; 148; 56

Judgement Text

1 VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,B JAIPUR JH JESK LH0 KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH. C. SHARMA, AM & SHRI VIJAY PA L RAO, JM VK;DJ VIHY LA- @ ITA NO. 720/JP/2019 FU/KZKJ.K O'KZ @ ASSESSMENT YEAR : 2011-12 THE ACIT CIRCLE-1 KOTA CUKE VS. M/S. CAREER POINT INFRA LTD. 112-B, SHAKTI NAGAR KOTA LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AADCC 2535N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SMT. RUNI PAUL, DCIT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI VIJAY GOYAL, CA LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 28/07/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 03 /08/2020 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A), KOTA DATED 08.03.2019 FOR THE A.Y. 2011-201 2, IN THE MATTER OF ORDER PASSED BY THE A.O. U/S 147 R.W.S.143(3) OF TH E INCOME TAX ACT, 1961 (IN SHORT, THE ACT). 2.1 IN THIS APPEAL,, REVENUE IS AGGRIEVED FOR DISAL LOWING THE INTEREST EXPENDITURE SO CLAIMED BY THE ASSESSEE. ITA 720/JP/2019 ACIT, CIRCL E-1, KOTA VS CAREER POINT INFRA,KOTA 2 2.2 RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS P ERUSED. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS A COMPANY AND DURING THE YEAR IT WAS ENGAGED IN THE BUSINESS OF RENTING OF IMMOVABLE PRO PERTY. THE ASSESSEE HAS FILED ITS ORIGINAL RETURN OF INCOME ON 29.09.20 11 WHICH WAS REVISED ON 16.02.2012 WHEREIN THE TOTAL INCOME OF THE ASSESSEE DECLARED RS. (-) 24,680/-. THE ASSESSMENT OF THE ASSESSEE COMPANY WA S COMPLETED U/S 143(3) OF THE ACT VIDE ORDER DATED 24.02.2014 WHERE IN THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED AT RS. 12,59,504/-. THERE AFTER THE ASSESSMENT WAS REOPENED BY ISSUE OF NOTICE U/S 148 OF THE ACT. THE ASSESSMENT OF THE ASSESSEE WAS COMPLETED U/S 147 R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 VIDE ORDER DATED 12.12.2017 ASSESSING THE TOTAL INC OME OF RS. 2,44,71,470/- BY MAKING THE FOLLOWING ADDITIONS: - A) DISALLOWANCE ON ACCOUNT OF INTEREST INCOME RS. 2,35,68,701/- B) DISALLOWANCE AS PER PROVISIONS OF SECTION 14A RS. 9,02,770/- 2.3 AGGRIEVED FROM THE ASSESSMENT ORDER, THE ASSESS EE FILED APPEAL BEFORE CIT(A). THE LD. CIT (A) ALLOWED THE APPEAL O F THE ASSESSEE. AGGRIEVED FROM THE ORDER OF LD. CIT (A), THE REVENU E IS IN APPEAL BEFORE US WHEREIN THE REVENUE CHALLENGED THE DELETION OF ADDI TION OF RS. 2,35,68,701/- MADE BY AO ON ACCOUNT OF INTEREST INC OME. ITA 720/JP/2019 ACIT, CIRCL E-1, KOTA VS CAREER POINT INFRA,KOTA 3 2.4 WHILE DELETING THE ADDITION ON ACCOUNT OF INTER EST INCOME, THE PRECISE OBSERVATION OF THE LD. CIT(A) IS AS UNDER:- I HAVE GONE THROUGH ASSESSEE'S SUBMISSION AND AO' S FINDINGS. THE ISSUE RAISED IN GROUND OF APPEAL NO. 1 IS RELAT ED TO DISALLOWANCE OF INTEREST INCOME OF RS. 23568701/- B Y NOT ALLOWING PROPORTIONAL DEDUCTION OF INTEREST EXPENSES. THE AP PELLANT HAS REFERRED TO THE ORDER PASSED BY MYSELF IN THE ORIGI NAL ASSESSMENT PROCEEDINGS MADE U/S 143(3) IN APPEAL NO. 571/ 13-1 4 DATED 07.07.2017 WHEREIN I HAD ALLOWED THE APPELLANT'S CL AIM OF EXPENSES MADE IN A REVISED COMPUTATION FILED IN ASS ESSMENT PROCEEDINGS WHERE INCOME FROM OTHER SOURCES HAD BEE N RE CATEGORIZED AS INCOME FROM BUSINESS & EXPENSES HELD TO BE ALLOWABLE. IN THE ORDER IT WAS HELD AS UNDER- AS THE ASSESSEE HAS FILED A REVISED COMPUTATION IN THE COURSE OF THE ASSESSMENT PROCEEDINGS ITSELF, IN MY VIEW, IT H OLDS GOOD AS EXCEPT THE CHANGE OF HEAD OF INCOME BEING FROM OTHE R SOURCES TO BUSINESS INCOME, ALL OTHER SUPPORTING MATERIAL REMA INED THE SAME INCLUDING THE AUDIT REPORT CLAIMING EXPENSES AGAINS T SUCH INCOME. THE EXPENSES OF RS 12,84,124 /-ARE THEREFORE HELD T O BE ALLOWABLE AGAINST THE SAID LEASE INCOME FROM BUSINESS AS THE PRIMARY OBJECT OF THE ASSESSEE AS PER THE MEMORANDUM IS ALSO TO DE AL IN IMMOVABLE PROPERTIES SUCH AS LAND AND BUILDINGS AND TO ACQUISITION, HANDLE, MANAGE, OPERATE, SALE, PURCHAS E, ACQUIRE, TAKE OR GIVE ON LEASE OR IN EXCHANGE OR IN ANY OTHER LAW FUL MANNER IN INDIA OR ABROAD LAND INCLUDING AGRICULTURAL LAND, P LOT, BUILDINGS, STRUCTURES, FARM HOUSE ETC. THIS GROUND OF APPEAL IS TREATED AS ALLOWED. THE MAIN OBJECTION OF THE AO IN THE ASSESSMENT PROC EEDINGS IS THAT SINCE NO COMMERCIAL ACTIVITY HAD TAKEN PLACE, THE E XPENSES CLAIMED AGAINST INTEREST NEEDED TO BE CAPITALIZED AND THE I NCOME LEARNED AN ACCOUNT OF INTEREST WAS TO BE SEPARATELY ASSESSED AS INCOME FROM OTHER SOURCES. ITA 720/JP/2019 ACIT, CIRCL E-1, KOTA VS CAREER POINT INFRA,KOTA 4 THE APPELLANT ON THE OTHER HAND HAS ARGUED THAT (I) SINCE THE BUSINESS HAD ALREADY COMMENCED, THE EXPENSES CLAIMED WERE ALLOWABLE AND (II) THE NET OF INTEREST EXPENSES (AFTER SETTING O FF THE INTEREST INCOME) COULD ONLY BE CAPITALIZED. IT IS SEEN AS PER THE DISCUSSION MADE IN COURSE OF APPEAL AGAINST THE ORIGINAL ASSESSMENT [MADE U/S 143(3) DATED 24.0 2.2014] THAT AGAINST THE RENTAL INCOME OF RS. 11 LAKH THE ASSESS EE'S CLAIM OF EXPENSES WAS FOUND ACCEPTABLE SINCE AS PER THE MEMO RANDUM, THE PRIMARY OBJECT OF THE ASSESSEE IS TO DEAL IN IMMOVA BLE PROPERTIES SUCH AS LAND, BUILDINGS AND TO HANDLE, MANAGE, OPER ATE, SALE, PURCHASE, ACQUIRE, TAKE OR GIVE ON LEASE OR IN EXCH ANGE OR IN OTHER LAWFUL MANNER IN INDIA OR ABROAD, LAND INCLUDING AG RICULTURAL LAND, PLOT, BUILDINGS, STRUCTURES, FORM HOUSE ETC. GIVEN THE ABOVE BACKGROUND AND MY EARLIER ORDER IN THE MATTER, I AM OF THE VIEW THAT IN THAT SENSE IT COULD BE HELD THAT THE BUSINESS OF THE APPELLANT HAD COMMENCED AND AGAINST THE INCOME, EXP ENSES WOULD BE ALLOWED. IT IS ALSO OBSERVED THAT THE SHARE CAPITAL OF THE A SSESSEE HAD ALREADY BEEN UTILIZED IN THE PURCHASE OF ASSETS IN THE EARL IER YEARS AS PER THE BALANCE SHEET OF THE EARLIER YEARS (AY 2008-09). TH US SUBSEQUENT BORROWINGS COULD BE ONLY FOR EITHER PURCHASE OF MORE ASSETS OR IN THE INTERVENING PERIOD FOR ADVANCING LOANS TO OTHER ENT ITIES ON WHICH INTEREST WAS EARNED. SINCE THE FUNDS WERE ALREADY BORROWED AND COULD HAVE BEEN FULLY CAPITALIZED LEGALLY BY THE APPELLANT AS ITS BUSINES S HAD 'COMMENCED' PER THE DISCUSSION MADE ABOVE, THE APPELLANT HAD IN FAC T REDUCED THE EXPENSES BY EARNING INCOME FROM THE FUNDS BORROWED B Y ADVANCING THEM TO OTHERS. IT IS NOT ALSO THE AO'S CASE THAT I NTEREST DISALLOWANCE DUE TO DISCUSSION OF BORROWED INTEREST BEARING FUNDS WAS POSSIBLE FOR ADVANCING TO RELATED ENTITIES FREE OF INTEREST. HE HAS ALSO NOT BOTHERED TO DETAIL EVEN THE HEAD UNDER WHICH HE HAS WORKED O UT THE INCOME ITA 720/JP/2019 ACIT, CIRCL E-1, KOTA VS CAREER POINT INFRA,KOTA 5 FROM INTEREST EARNED. IN FACT HE HAS ALLOWED AMORTI ZATION OF PRELIMINARY EXPENSES WHICH SHOWS THAT THE BUSINESS ACTIVITIES ARE TREATED AS COMMENCED. IN FACT EVEN IF THE ALTERNATE ARGUMENT TAKEN BY THE A.0 IS HYPOTHETICALLY TO BE VIEWED, AS PER HIGH COURT OF MA DRAS DECISION IN COMMISSIONER OF INCOME-TAX V. VGR FOUNDATIONS298 IT R 132 (MADRAS) IT HAS BEEN OPINED THAT- SECTION 57 OF THE INCOME-TAX ACT, 1961 - INCOME FRO M OTHER SOURCES - DEDUCTIONS ASSESSMENT YEARS 1997-98 AND 1998-99 - I NTEREST ON MONEYS BORROWED FOR PERIOD PRIOR TO COMMENCEMENT OF BUSINES S WAS TO BE ALLOWED AS DEDUCTION FROM INTEREST UNDER SECTION 57 WHILE COMPUTING 'INCOME FROM OTHER SOURCES' IN RESPECT OF INTEREST RECEIVED IN BOKARO STEEL LTD. 119991 236 ITR 315, IT WAS A CA SE OF A GOVERNMENT COMPANY WHICH DURING THE PERIOD OF CONSTRUCTION OF THE PLANT HAD ADVANCED MONIES TO CONTRACTORS ON WHICH IT WAS EARNI NG INTEREST, RECEIVED RENT FROM QUARTERS LET OUT TO EMPLOYEES, R ECEIVED HIRE CHARGES ON PLANT LET OUT TO CONTRACTORS AND RECEIVED ROYALT Y ON STONES REMOVED FROM THE ASSESSEE'S LANDS. THE SUPREME COURT CONSID ERED ALL THESE ACTIVITIES TO BE INTRICATELY CONNECTED WITH THE CON STRUCTION ACTIVITY AND ACCORDINGLY HELD THAT INTEREST RECEIVED, RENT RECEI VED, HIRE CHARGES AND ROYALTY, ETC., WOULD BE REDUCED FROM THE COST OF THE ASSETS AND IT WOULD NOT BE TREATED AS INCOME. SIMILAR VIEW WAS EXPRESSED BY THE SUPREME COURT IN THE CASE KARNAL CO-OPERATIVE SUGAR MILLS L TD. 12000] 243 ITR 2. IDENTICAL VIEW WAS ALSO TAKEN BY THE SUPREME COURT I N THE CASES OF BONGAIGAON REFINARY AND PETROCHEMICALS LTD. 12001] 251 ITR 329 AND KARNATAKA POWER CORPORATION 120011247 1TR 268. HIGH COURT OF DELHI IN VODAFONE SOUTH LTD V. COMMIS SIONER OF INCOME-TAX 61 TAXMANN.COM 415 (DELHI) HELD- WHERE ASSESSEE HAVING AVAILED OF LOAN FROM HSBC, AD VANCED SAID AMOUNT TO ITS HOLDING COMPANY, I.E., SCL, SINCE THERE WAS A DIRECT NEXUS BETWEEN EARNING OF INTEREST ON LOAN ADVANCED BY ASSESSEE TO SCL AND PAYMENT OF INTEREST TO HSBC ON LOAN DRAWN IN TERMS OF SANCTION LETTER, ASSESSEE'S CLAIM FOR NETTING OFF OF INTEREST IN TERMS OF SECTI ON 57(III) WAS TO BE ALLOWED. ITA 720/JP/2019 ACIT, CIRCL E-1, KOTA VS CAREER POINT INFRA,KOTA 6 THE ITAT DELHI BENCH 'A' IN INCOME-TAX OFFICER V. B EAM ESTATES (P.) LTD. 15 TAXNAANN.COM 386 (DELHI) HELD- SECTION 57 OF THE INCOME-TAX ACT, 1961 - INCOME FRO M OTHER SOURCES - DEDUCTIONS WHETHER WHERE THERE IS DIRECT NEXUS BET WEEN AMOUNT ADVANCED AND AMOUNT BORROWED, INTEREST EARNED ON AMO UNT ADVANCED IS DIRECTLY CORRELATED TO INTEREST SPENT ON AMOUNT BOR ROWED, AND INTEREST SO PAID SHOULD BE ALLOWED AS EXPENDITURE IN EARNING IN TEREST-HELD, YES THUS, IN VIEW OF THE FACTS AND LEGAL PRECEDENTS ON THE ALTERNATE VIEW AS WELL, IN MY OPINION, THE NET OF INTEREST BORROWE D 86 EARNED BEING RS. 1,59, 96,193/- WAS RIGHTLY CAPITALIZED BY THE A PPELLANT COMPANY IN THE RESPECTIVE FIXED ASSETS UNDER PROCESS OF BEING SET UP. NO ADDITION OF RS. 2,35, 68,701/- SHOULD THUS HAVE BEEN MADE SE PARATELY BY THE AO. THE ADDITION IS THEREFORE DIRECTED TO BE DELETE D. 2.5 HOWEVER, THE DISALLOWANCE MADE U/S 14A WAS CONF IRMED BY THE LD.CIT(A) AGAINST WHICH THE ASSESSE IS NOT IN APPEA L BEFORE US. 2.6 IT WAS ARGUED BY THE LD.DR THAT THE LD. CIT(A) HAS WRONGLY DELETED THE DISALLOWANCE OF INTEREST EXPENDITURE IN SO FAR AS THE ASSESSEE HAD NOT SHOWN ANY BUSINESS INCOME. LD. DR FURTHER RELIED O N THE ORDER PASSED BY THE AO. 2.7 ON THE OTHER HAND, IT WAS CONTENDED BY THE LD. AR OF THE ASSESSEE THAT INTEREST EXPENDITURE WAS INCURRED FOR THE PURP OSE OF BUSINESS AND THE SAME WAS INCURRED AFTER ASSESSEE COMMENCED OPERATIO N. THEREFORE, THE SAME WAS TO BE ALLOWED AGAINST INTEREST INCOME. AS AN ALTERNATE, THE LD. AR OF THE ASSESSEE CONTENDED THAT EVEN IF THE INTER EST INCOME IS TAXED ITA 720/JP/2019 ACIT, CIRCL E-1, KOTA VS CAREER POINT INFRA,KOTA 7 UNDER THE HEAD INCOME FROM OTHER SOURCES, ANY EX PENDITURE INCURRED FOR EARNING SUCH INTEREST INCOME IS TO BE ALLOWED WHILE COMPUTING NET INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. 2.8 WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CA REFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. FROM THE RECOR D, WE FOUND THAT THE ASSESSEE IS A COMPANY REGISTERED WITH ROC JAIPUR ON DATED 06/12/2007. REGISTRAR OF COMPANIES HAD ISSUED CERTIFICATE OF CO MMENCEMENT OF BUSINESS ON 19/12/2007. THE MAIN OBJECT OF THE COMP ANY IS TO DEAL IN IMMOVABLE PROPERTIES SUCH AS LAND AND BUILDING AND TO ACQUISITION, SALE, PURCHASE, GIVEN ON LEASE OF LAND, BUILDING DEVELOP THE REAL ESTATE PROJECTS AND LEASING THE LAND, BUILDING AND LAND & BUILDING. THE COMPANY HAS STARTED DEVELOPMENT OF REAL ESTATE PROJECT IN THE F .Y. 2009-10 WHICH CAN BE EASILY VERIFIED IN PREVIOUS YEAR FIGURE STATED I N THE BALANCE SHEET OF F.Y. 2010-11. THE COMPANY RECEIVED THE LEASE RENT FROM L EASING OUT ITS LAND AND DURING THE YEAR IT RECEIVED RENTAL INCOME OF RS . 11,00,000/- WHICH IS SHOWN IN PROFIT & LOSS ACCOUNT FOR THE YEAR 2010-11 . THE RENTAL ACTIVITY IS PART OF MAIN OBJECT OF THE ASSESSEE COMPANY AND THU S THE SAME IS CHARGEABLE AS INCOME FROM BUSINESS & PROFESSION. R ELIANCE IS PLACED ON ITA 720/JP/2019 ACIT, CIRCL E-1, KOTA VS CAREER POINT INFRA,KOTA 8 SUPREME COURT DECISION CHENNAI PROPERTIES AND INVESTMENTS LTD. V. COMMISSIONER OF INCOME TAX [2015] 373 ITR 673 (SC) AND M/S RAYALA CORPORATION PVT LTD VS ACIT [2016] 386 ITR 500 (SC) THOUGH IN THE COMPUTATION OF TOTAL INCOME THIS INCOME WAS INADVER TENTLY OFFERED FOR TAXATION UNDER THE HEAD INCOME FROM OTHER SOURCES INSTEAD OF INCOME FROM BUSINESS & PROFESSION BUT THE SAME WAS CORREC TED BY FILING THE REVISED COMPUTATION OF TOTAL INCOME DURING THE COUR SE OF ORIGINAL ASSESSMENT PROCEEDINGS BY RE-CATEGORIZING THE RENTA L INCOME FROM INCOME FROM OTHER SOURCE TO INCOME FROM BUSINESS. IT IS FU RTHER RELEVANT TO MENTION HERE THAT DURING THE COURSE OF APPELLATE PR OCEEDINGS OF APPEAL (FILED AGAINST THE ASSESSMENT ORDER PASSED U/S 143( 3) OF THE ACT), THIS RECEIPT WAS ACCEPTED BY LD CIT(A) AS BUSINESS INCOM E OF THE ASSESSEE. THE LD CIT (A) ACCEPTED THAT THE ASSESSEE COMPANY H AS COMMENCED ITS BUSINESS OPERATIONS. THUS ALL THESE FACTS SHOW THAT THE ASSESSEE COMMENCED ITS BUSINESS ACTIVITIES AND ALSO EARNED I NCOME FROM BUSINESS. FROM THE RECORD, WE ALSO FOUND THAT THE AO HIMSELF HAS ALLOWED THE AMORTIZATION OF PRELIMINARY EXPENSES WHICH IS ALWAY S ALLOWED UPON COMMENCEMENT OF BUSINESS ACTIVITIES. THUS THE ASSE SSEE WAS NOT IN PRE-COMMENCEMENT PERIOD AND SET-OFF OF INTEREST INC OME OF RS. ITA 720/JP/2019 ACIT, CIRCL E-1, KOTA VS CAREER POINT INFRA,KOTA 9 2,35,68,701/- WITH INTEREST EXPENSES WAS CLAIMED AS ALLOWABLE & BALANCE AMOUNT OF RS. 1,59,96,193 HAS BEEN CAPITALIZED IN T HE RESPECTIVE FIXED ASSETS. 2.9 FROM THE RECORD, WE ALSO FOUND THAT INVESTMENT IN INTEREST EARNING ADVANCES WERE OUT OF INTEREST BEARING FUNDS BORROWE D BY THE ASSESSEE. IN THIS REGARD, WE OBSERVE THAT IN AY 2008-09 IN WHIC H THE COMPANY WAS INCORPORATED, THE SHARE CAPITAL WAS ENTIRELY UTILIZ ED IN INVESTMENT OF FIXED ASSETS AND THEREAFTER THE SUBSEQUENT BORROWING WERE MADE EITHER FOR PURCHASE OF MORE ASSETS OR IN INTERVENING PERIOD FO R ADVANCING LOANS TO OTHER ENTITIES ON WHICH INTEREST WAS EARNED. THE AS SESSEE HAS ALSO ESTABLISHED NEXUS OF INTEREST PAID WITH INTEREST RE CEIVED I.E. UTILISATION OF INTEREST BEARING BORROWED FUNDS INTO INTEREST EARNI NG ADVANCES. THEREFORE, THERE IS NO JUSTIFICATION FOR DISALLOWING INTEREST EXPENDITURE SO INCURRED. EVEN IF THE INTEREST RECEIVED BY THE ASSESSEE IS TR EATED AS TAXABLE UNDER THE HEAD INCOME FROM OTHER SOURCES THEN STILL THE DEDUCTION ON A/C OF INTEREST PAID BY THE ASSESSEE TO THE PARTIES FROM W HOM THE ASSESSEE TAKEN LOAN AND UTILIZED TO ADVANCE THE MONEY TO PERSONS F ROM WHOM INTEREST RECEIVED SHOULD BE ALLOWED TO THE ASSESSEE. FOR COM PUTING THE INCOME ITA 720/JP/2019 ACIT, CIRCL E-1, KOTA VS CAREER POINT INFRA,KOTA 10 TAXED UNDER THE HEAD INCOME FROM OTHER SOURCES U/ S 56 OF THE INCOME TAX ACT THE DEDUCTION OF PAYMENT OF INTEREST MADE T O EARN SUCH INCOME SHOULD BE ALLOWED TO THE ASSESSEE AS PER PROVISIONS OF SECTION 57 (III) OF THE ACT. FINDINGS OF LD CIT(A) IN THIS REGARD IS AT PAGE 22-23 OF HIS ORDER. THEREFORE, EVEN OTHERWISE ALSO IF IT IS PRESUMED TH AT THE ASSESSEE DID NOT COMMENCE ITS BUSINESS OPERATION AND WAS UNDER PRE-C OMMENCEMENT PERIOD THAN STILL IN VIEW OF FOLLOWING CASE LAW THE INTEREST EXPENSES SHOULD BE ALLOWED AGAINST INTEREST EARNED IN PRE-COMMENCEM ENT PERIOD. FOR THIS PURPOSE, RELIANCE MAY BE PLACED ON THE FOLLOWING DE CISIONS. (I) HON'BLE HIGH COURT OF MADRAS IN THE CASE CIT V . VGR FOUNDATIONS 298 ITR 132 (MADRAS). [LD CIT HAS TAKEN NOTE OF THIS CASE LAW AT PAGE NO 22 OF HIS ORDER]. (II) HONBLE SUPREME COURT IN THE CASE OF BOKARO ST EEL LTD. [1999] 236 ITR 315, [LD CIT HAS TAKEN NOTE OF THIS CASE LAW AT PAGE NO 22 OF HIS ORDER] (III) HIGH COURT OF DELHI IN VODAFONE SOUTH LTD V. COMMISSIONER OF INCOME-TAX 61 TAXMANN.COM 415 (DELH I) 236 ITR 315. [LD CIT HAS TAKEN NOTE OF THIS CASE LAW AT PA GE NO 22 OF HIS ORDER] (IV) THE ITAT DELHI BENCH 'A' IN INCOME-TAX OFFICER V. BEAM ESTATES (P.) LTD. 15 TAXMANN.COM 386 (DELHI) 236 ITR 315 [LD CIT HAS TAKEN NOTE OF THIS CASE LAW AT PAGE NO 22 OF HI S ORDER] ITA 720/JP/2019 ACIT, CIRCL E-1, KOTA VS CAREER POINT INFRA,KOTA 11 2.10 IN VIEW OF THE ABOVE DISCUSSIONS, WE CONFIRM THE DE TAILED FINDINGS SO RECORDED BY THE LD. CIT(A) WHICH IS AS PER MATERIAL S PLACED ON RECORD, REQUIRING NO INTERFERENCE AT OUR PART. 3.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03/08/2 020. SD/- SD/- FOT; IKY JKO JESK LH0 KEKZ (VIJAY PAL RAO) (RAMESH. C. SHARMA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 03 /08/2020. *MISHRA . VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT, CIRCLE-1, KOTA 2. IZR;FKHZ@ THE RESPONDENT- M/S. CAREER POINT INFRA LTD. , KOTA 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 720/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSTT. REGISTRAR