Assessee wins appeals for multiple assessment years, Revenue's appeals dismissed or partly allowed.

The appeals of the assessee for assessment years 1998-99 to 2007-08, 2009-10, and 2010-11 were allowed. The appeal of the assessee for assessment year 2008-09 was partly allowed for statistical purposes. The appeals of the Revenue for assessment years 2002-03 to 2006-07 were dismissed, and the appeal of the Revenue for assessment year 2007-08 was partly allowed.

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Issues Involved:
1. Disallowance of depreciation on leased assets.
2. Disallowance of expenditure under Section 36(1)(iii) of the Income Tax Act.
3. Treatment of profit on sale of shares as business income.
4. Restriction of exemption under Section 10(23G) of the Income Tax Act.
5. Disallowance of staff welfare expenses under Section 40A(9).
6. Exemption under Section 10(33) of the Income Tax Act.
7. Taxation of interest on sticky loans under Section 43D.
8. Disallowance of deduction under Section 80M.
9. Disallowance of bad debts under Section 36(1)(vii).
10. Applicability of MAT provisions.
11. Allowance of interest paid under Section 201(1A) on TDS.
12. Deduction under Section 36(1)(viii) on account of special reserve.
13. Additional ground for deduction under Section 36(1)(viia).
14. Disallowance under Section 14A read with Rule 8D.

Detailed Analysis:

1. Disallowance of Depreciation on Leased Assets:
The Tribunal noted that the issue of depreciation on leased assets was already adjudicated in favor of the assessee in previous years, specifically in ITA No. 3626/Mum/2001 for AY 1997-98. The Tribunal directed the Assessing Officer to allow the claim of depreciation on lease of assets where it involves "financial lease." The Tribunal set aside the order of the CIT(A) and allowed the ground raised by the assessee for all relevant assessment years.

2. Disallowance of Expenditure under Section 36(1)(iii):
The Tribunal observed that the issue of disallowance under Section 36(1)(iii) was covered in favor of the assessee by the decision in ITA No. 3626/Mum/2001 for AY 1997-98. The Tribunal directed the Assessing Officer to allow the interest expenditure claimed by the assessee, as the investments were made in the course of business activities. The Tribunal allowed the ground raised by the assessee and dismissed the ground raised by the Revenue.

3. Treatment of Profit on Sale of Shares as Business Income:
The Tribunal noted that the issue was covered in favor of the assessee by the decision in ITA No. 3626/Mum/2001 for AY 1997-98. The Tribunal directed the Assessing Officer to treat the profit on sale of investment as capital gains, as it was consistently accepted from AY 2002-03 onwards. The Tribunal allowed the ground raised by the assessee.

4. Restriction of Exemption under Section 10(23G):
The Tribunal observed that the issue was covered by the decision in ITA No. 3626/Mum/2001 for AY 1997-98. The Tribunal directed the Assessing Officer to allow the deduction under Section 10(23G) on a gross basis, after deducting direct expenses attributable to earning such income. The Tribunal allowed the ground raised by the assessee.

5. Disallowance of Staff Welfare Expenses under Section 40A(9):
The Tribunal noted that the expenses were incurred for staff welfare and were allowable under Section 37(1) of the Act. The Tribunal relied on the decision of the Hon'ble Bombay High Court in the case of PCIT vs State Bank of India, which allowed similar expenses. The Tribunal set aside the order of the CIT(A) and directed the Assessing Officer to allow the expenditure. The Tribunal allowed the ground raised by the assessee and dismissed the ground raised by the Revenue.

6. Exemption under Section 10(33):
The Tribunal observed that the assessee's own funds were far more than the investments in shares and securities. The Tribunal relied on the decisions of the Hon'ble Bombay High Court in CIT vs HDFC Bank Ltd. and CIT vs Reliance Utilities & Power Ltd., which held that investments made out of own funds are not subject to disallowance. The Tribunal set aside the order of the CIT(A) and directed the Assessing Officer to delete the disallowance. The Tribunal allowed the ground raised by the assessee.

7. Taxation of Interest on Sticky Loans under Section 43D:
The Tribunal noted that Section 43D was introduced w.e.f. 1.4.1991 and does not have retrospective application. The Tribunal relied on the decision of the Hon'ble Supreme Court in CIT vs State Bank of Travancore, which held that income accrued in earlier years cannot be taxed twice. The Tribunal directed the Assessing Officer to delete the addition. The Tribunal allowed the ground raised by the assessee.

8. Disallowance of Deduction under Section 80M:
The Tribunal observed that similar disallowances were restricted to 1% of dividend income in earlier years. The Tribunal directed the Assessing Officer to restrict the disallowance under Section 80M to 1% of the dividend income. The Tribunal allowed the ground raised by the assessee.

9. Disallowance of Bad Debts under Section 36(1)(vii):
The Tribunal noted that the assessee fulfilled the conditions for claiming bad debts under Section 36(1)(vii). The Tribunal relied on the decision of the Hon'ble Supreme Court in T.R.F Ltd. vs CIT, which held that once bad debts are written off in the books, they are allowable. The Tribunal upheld the order of the CIT(A) and dismissed the ground raised by the Revenue.

10. Applicability of MAT Provisions:
The Tribunal observed that the provisions of Section 115JB were not applicable to banking companies for the relevant assessment years. The Tribunal relied on the decision in assessee's own case for AY 2004-05. The Tribunal set aside the order of the CIT(A) and allowed the ground raised by the assessee.

11. Allowance of Interest Paid under Section 201(1A) on TDS:
The Tribunal noted that the jurisdictional High Court in Ferro Alloys Corporation Ltd. vs CIT decided the issue against the assessee. The Tribunal reversed the order of the CIT(A) and allowed the ground raised by the Revenue.

12. Deduction under Section 36(1)(viii) on Account of Special Reserve:
The Tribunal observed that the CIT(A) directed the Assessing Officer to allow the deduction after verifying the creation of the special reserve. The Tribunal upheld the order of the CIT(A) and dismissed the ground raised by the Revenue.

13. Additional Ground for Deduction under Section 36(1)(viia):
The Tribunal admitted the additional ground raised by the assessee following the decision of the Hon'ble Supreme Court in Catholic Syrian Bank Ltd. vs CIT. The Tribunal restored the issue to the Assessing Officer for examination. The Tribunal allowed the additional ground for statistical purposes.

14. Disallowance under Section 14A read with Rule 8D:
The Tribunal noted that the issue was already decided in favor of the assessee in para 26 of the order, where it was held that the investments were made out of own funds. The Tribunal directed the Assessing Officer to delete the disallowance. The Tribunal allowed the ground raised by the assessee.

Conclusion:
- Appeals of the assessee for assessment years 1998-99 to 2007-08, 2009-10, and 2010-11 are allowed.
- Appeal of the assessee for assessment year 2008-09 is partly allowed for statistical purposes.
- Appeals of the Revenue for assessment years 2002-03 to 2006-07 are dismissed.
- Appeal of the Revenue for assessment year 2007-08 is partly allowed.

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