https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=762267 https://www.taxtmi.com/caselaws?id=762267 Claim of exemption u/s 10(23G) - disallowance u/s 14 in respect of exempt income - contention of the assessee that it has more than sufficient interest free funds available for making the investments - HEKD THAT:- As seen from the chart that the assessee has sufficient interest free funds available with it for making the impugned investment. Therefore, the ratio laid down in the case of CIT vs Reliance Utilities Power Ltd.[ 2009 (1) TMI 4 - BOMBAY HIGH COURT] HDFC Bank [ 2014 (8) TMI 119 - BOMBAY HIGH COURT] squarely apply wherein the Hon ble Superior Courts have held that, where the assessee has common pool of funds, it has to be presumed that the investment made is out of the interest free funds available with the assessee. While drawing such presumption, availability of interest free funds as on the date of balance-sheet has to be seen. As decided in South Indian Bank Ltd.[ 2021 (9) TMI 566 - SUPREME COURT] it will be presumed that interest free funds have been utilized for making the investments and further it is the assessee who has the right of appropriation and also the right to assert from what part of the fund a particular investment is made and, therefore, it may not be permissible for the revenue to make an estimation of a proportionate figure. Contentions of the ld. D/R become redundant. Depreciation on leased assets - HELD THAT:- We find force in the claim of the assessee. The Co-ordinate Bench in AY 2004-05 [ 2017 (11) TMI 1839 - ITAT MUMBAI] has considered a similar claim allowed as there is no new lease transaction. The assessee has claimed depreciation on its own fixed assets and depreciation claimed on leased assets were continuing from past tease transactions. Notably, in assessment year 1997-98 Tribunal while deciding the issue had allowed assessee s claim of depreciation. Addition made u/s 41(4) - assessee has written back bad debts which comprises of cash write back and non-cash write backs - HELD THAT:- We find force in the contention of the ld. Counsel for the assessee. The Coordinate bench in assessee s own case for AY 2003-04 [ 2023 (7) TMI 1500 - ITAT MUMBAI] wherein as consistent with the view expressed by the Tribunal in the preceding assessment year as referred to above, we restore the issue to the file of the Assessing Officer for considering afresh. Amount written off and claimed as bad and doubtful debts - additions were challenged before the ld. CIT(A) and it was strongly contended that the bad debts written off by the assessee during the year under consideration, fulfil all the conditions laid down u/s 36(2) - HELD THAT:- As the claim of the assessee falls under Clause (i), wherein it has been specifically mentioned that debt represents money lent in the ordinary course of the business of banking or money-lending which is carried on by the assessee. In our considered opinion, the contention of the ld. D/R that the ratio laid down by the Hon ble Supreme Court in the case of TRF Limited [ 2010 (2) TMI 211 - SUPREME COURT] has been diluted in the case of Khyati Realtors Pvt. Ltd. [ 2022 (8) TMI 1141 - SUPREME COURT] is not a proper way of interpreting the judgment of the Hon ble Supreme Court and since the ld. CIT(A) has rightly followed the decision of the Hon ble Supreme Court (supra), we do not find any error or infirmity in the findings of the ld. CIT(A) which calls for any interference. Accordingly, Ground are dismissed. Claim of business loss and sales promotion expenses - HELD THAT:- There is no dispute that the loss claimed on sale of assets was in the ordinary course of business. It is also not in dispute that the discrepant notes not accepted by the RBI has to be written off as business loss and similarly, the offers made to credit card customers cannot be said to be for non-business purposes. Considering the facts of the case in totality and on finding that in earlier AYs a similar claim was allowed by the ld. First Appellate Authority, following the rule of consistency, the claim is allowed and the findings of the ld. CIT(A) cannot be faulted with. Accordingly, Ground is dismissed. Disallowance of club membership fees - HELD THAT:- Hon ble Supreme Court in United Glass Manufacturing Co. Ltd. [ 2012 (9) TMI 914 - SUPREME COURT] has held that club membership fees for employees are to be treated as business expenditure of a company under section 37. Disallowance of loss on investments made in South Asian Regional Apex Fund - said loss was claimed vide revised computation of income filed during the course of assessment proceedings - AO was of the firm belief that the ratio laid down in the case of Goetze India Pvt. Ltd. [ 2006 (3) TMI 75 - SUPREME COURT] squarely apply and as the said loss was not claimed vide revised return of income, the AO denied the claim of loss - HELD THAT:- When the matter was agitated before the ld. CIT(A), the ld. CIT(A) accepted the view taken by the AO without realizing the fact that the Hon ble Supreme Court has not put any fetter on the powers of the First Appellate Authority to consider the claim of loss through computation of income - we deem it fit to restore the issue to the file of the AO for examination/verification of the claim of loss as per the provisions of law and deciding the issue accordingly. Accordingly, Ground No. 4 is allowed for statistical purposes. Case-Laws Income Tax Fri, 25 Oct 2024 00:00:00 +0530