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Judgment
The present appeal by the revenue is directed against an order dated 3rd August, 2017 of Income Tax Appellate Tribunal, Cuttack Bench, Cuttack (ITAT) in ITA No. 231/ CTK/2015 for the Assessment Year (AY) 2011-12.
The questions sought to be urged for consideration by this Court by the Revenue reads as under :
“Whether on the facts and in the circumstances of the case and in law the ITAT is justified in law and in view of the provisions of sec.36 (1)(iii) of the I.T. Act, 1961 the ITAT is justified in holding that the assessee-company had capitalised the interest on borrowed capital for acquiring fixed assets thereby eligible for deduction when no such interest has actually been capitalised in the books of account of the assessee-company during the financial year 2010-11 relevant to asst. year 2011-12.”
The CIT(A) and ITAT have concurrently held that the capital work in progress of the assessee consisted of both captive power plant as well as the ore beneficiation plant. The assessee had availed term loan for setting up of the said plants and capitalized the interest pertaining to the term loans for both the plants.
In terms of the Accounting Standard 16 issued by ICAI, the assessee was entitled to capitalize the finance charges and interest.
The Court is unable to find any error having been committed either by the CIT (A) or the ITAT in respect of the above conclusion. No substantial question of law arises. The appeal is dismissed.
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