Income Tax 7 August 2026
ITAT Rules on Tax Disallowance
The Income Tax Appellate Tribunal has ruled that there will be no disallowance under Section 40(a)(ia) if interest expense is capitalised as work in progress, providing relief to taxpayers who had claimed such expenses as deductions. This ruling has significant implications for businesses and individuals who have received tax notices for disallowance of interest expenses.
The ITAT has ruled in favour of taxpayers who had capitalised interest expenses as work in progress. Key points of the ruling include:
- No disallowance under Section 40(a)(ia) if interest expense is capitalised
- The ruling applies to interest expenses that are capitalised as work in progress
- Taxpayers who have received notices for disallowance of interest expenses may be able to claim relief under this ruling.
The ruling is expected to provide relief to businesses and individuals who have been disputing tax notices for disallowance of interest expenses.
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