Court upholds disallowance of bad debts provisions & preliminary expenses, denies amortization entitlement.

The High Court dismissed all appeals related to the disallowance of provisions for bad debts and non-performing assets, disallowance of preliminary expenses under Section 35(D), and entitlement to amortization of preliminary expenses. The Court upheld the decisions of the lower authorities, citing previous judgments against the assessee in similar cases. The appeals were dismissed without costs.

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Issues involved:
Appeal against disallowance of provisions for bad debts and non-performing assets, disallowance of preliminary expenses under Section 35(D), entitlement to amortization of preliminary expenses.

Analysis:

Issue 1: Disallowance of provisions for bad debts and non-performing assets
The assessee, engaged in banking and financial services, filed a return for the assessment year 1998-99 showing a loss. The Assessing Officer disallowed provisions for bad debts and non-performing assets totaling Rs. 5,03,59,458 under Section 35(D) and added it to the taxable income. The Commissioner of Income Tax (Appeals) upheld this decision, leading to an appeal to the Income Tax Appellate Tribunal. The Tribunal confirmed the disallowance, citing a judgment of the jurisdictional High Court. The High Court noted that the issue had been previously considered in the assessee's earlier years and was decided against them. The Division Bench's previous judgment was cited, and the appeal on this issue was dismissed.

Issue 2: Disallowance of preliminary expenses under Section 35(D)
The Assessing Officer also disallowed preliminary expenses of Rs. 31,13,223 under Section 35(D) and added it to the taxable income. The Commissioner of Income Tax (Appeals) upheld this decision, and the Tribunal followed the decision of the assessee's own case for previous assessment years. The High Court, referring to a Division Bench judgment, held that the issue had been previously decided against the assessee. The appeal on this issue was also dismissed.

Issue 3: Entitlement to amortization of preliminary expenses
Regarding the entitlement to amortization of preliminary expenses under Section 35(D) towards share issue expenses, the High Court noted that this issue had been decided against the assessee in a previous case. Citing another Division Bench judgment, the Court held that Section 35(D) was inapplicable in the given circumstances. The appeal on this issue was dismissed.

In conclusion, based on the precedents and judgments cited, the High Court dismissed all appeals related to the disallowance of provisions for bad debts and non-performing assets, disallowance of preliminary expenses under Section 35(D), and entitlement to amortization of preliminary expenses. The Court upheld the decisions of the lower authorities and dismissed the appeals without costs.

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