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Shristi Hotel Pvt. Ltd., AY- 2012-13 (hereinafter referred to 'WBHIDCO') in the year 2005. The appellant company has also sought and obtained approval from various local, state and central authorities in connection with the said hotel project. The appellant had also obtained long term borrowings from Axis Bank for the hotel project against mortgage of entire leasehold land purchased from WBHIDCO and paripassu charge on all present and future moveable fixed & current assets etc. During the relevant financial year 2011-12, the hotel was under construction and the project was yet to complete. In the Profit & Loss A/c prepared for the year ending on 31.03.2012, the appellant company had credited income of Rs.7,02,72,979/- derived from Fixed Deposits and funds. The appellant company had debited expenses of Rs.12,00,81,779/- in the Profit & Loss A/c. Out of the said expenditure, Rs.3,27,03,538/- was capitalized by the appellant and a sum of Rs.2,42,65,891/- was reversed being expenses of earlier years. Accordingly, the net sum of Rs.6,31,12,350/- was claimed as deduction in the Profit & Loss A/c against income credited therein.