TaxTMI 
TaxTMI 
2009 (9) TMI 77
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....he first ground in its appeal is that the Commissioner of Income-tax (Appeals) has erred in confirming the order of the Assessing Officer in disallowing Rs. 2,98,283 being the rights issue expenses and Rs. 44,42,458 being public issue expenses. It is the case of the assessee that the Commissioner of Income-tax (Appeals) ought to have observed that the judgment of the Supreme Court in the case of Brooke Bond India Ltd. v. CIT [1997] 225 ITR 798 is not applicable to the present case as the money raised by the assessee was meant for the purpose of working capital requirements of lending and investing operations. In fact this point was considered by the Tribunal in the assessee's own case for the earlier assessment years 2000-01 and 2001-02 ....
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....e Appellate Tribunal rendered in the case of Toyo Engg. India Ltd. v. Joint CIT [2006] 100 TTJ 373. The learned chartered accountant explained that the Tribunal has considered the basic principles regarding the year of allowability of business expenditure especially prior period expenses while passing the said judgment. The Tribunal has held that the details of expenses have been received by the assessee at head office only after the close of the accounting year, though technically treated as prior period expenses, are allowable for the assessment year in which they were normally eligible for deduction. The learned chartered accountant submitted that the case of the assessee in respect of the present appeal is squarely covered by the said j....
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....diture in the books of account. Therefore, even though they are treated technically as prior period expenses, they relates to a continuous flow of expenditure. The Tribunal held, therefore, there is no justification in disallowing the expenditure otherwise normally eligible for deduction. The Assessing Officer has to see that whether those expenses claimed by the assessee, even though technically related to the earlier assessment years, are allowable for the reason that the particulars and quantum of expenditures were assigned only during the previous year relevant to the assessment year under appeal. The third ground raised by the assessee is that the Commissioner of Income-tax (Appeals) has erred in confirming the order of the Assessin....
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....f United Commercial Bank v. CIT [1999] 240 ITR 355 (SC). The Supreme Court held that in the case of such banks, there was no question of following two different methods for valuing its stock-in-trade (investments) because the bank was required to prepare the balance-sheet in the prescribed form and it had no option to change it. The court held that in the light of the balance-sheet what is to be taxed for the purpose of income-tax is the real income which is to be deduced on the basis of the accounting system regularly maintained by the assessee. The court also held that diminution in the value of investment would be reflected by such banks in its balance-sheet in valuing at cost of realisable value, whichever is less. In the present cas....
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....ation of stock-in-trade is deductible or not, the answer is in favour of the assessee-bank as held by the Supreme Court in the case of United Commercial Bank [1999] 240 ITR 355. Further it was stated by the learned chartered accountant, at the time of hearing, that later on certain amount was realised by the assessee-bank against the initial capital contribution to UTI and the same has already been offered for assessment as income under section 41(1) of the Act. In the above scenario the full circle of the transaction is clear. The diminution in the value of the investment as it stood at the end of the relevant previous year is a business loss, which is eligible for deduction in computing the taxable income of the assessee-bank. Accordin....
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....l branches where the sufficient provision is not available in the accounts for the absorption of those bad debts. Therefore, the Commissioner of Income-tax (Appeals) has rightly directed the Assessing Officer to allow the bad debts written off relating to non-rural branches of Rs. 1,15,22,13,658 in full and confirming the disallowance of Rs. 24,53,972 relating to rural branches. This issue is decided in favour of the assessee. The assessee is partly successful in its appeal filed before us. Regarding the appeal filed by the Revenue, (I.T.A. No. 790/Coch/2007), the only ground permitted by the COD to agitate before the Tribunal is the ground that the Commissioner of Income-tax (Appeals) has erred in deleting the disallowance of Rs. 56,42,....