2014 (2) TMI 594

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....filed its return of income on 31/10/01 declaring total income at Rs. 61,64,43,738/-, which was processed u/s 143(3) of the Act on 30/01/04 determining the total income at Rs. 62,72,03,530/- making the following additions:-      1. Interest accrued but not due as on 31/03/01 of Rs. 84,71,62,630/-.      2. Disallowance out of claim of depreciation 1,20,00,948/-      3. Loss on forward exchange transaction of Rs. 8,74,020/-      4. Proportionate swap cost on the outstanding swap contracts of Rs. 79,61,454/- 4. On appeal, the CIT(A) confirmed the said additions/disallowances made by the AO. Thereafter, the AO initiated penalty proceedings u/s 271(1)(c) of the A....

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....have gone through the f acts of the case carefully. It is a fact that there is no fresh lease transactions on which depreciation is not allowed by the AO. The disallowance of depreciation made by the AO in the assessment order for this assessment year 2001-02 is with regard to the lease transactions entered by the appellant during the assessment year 1995-96. The appellant contends that these are genuine trans actions and entitled for depreciation. But this contention of the appellant was not accepted by the department. However, in consistent with the view taken by the appellant in earlier years, the appellant has claimed depreciation in this year. There is no concealment of particulars of income nor furnishing of inaccurate particulars of ....

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....of the swap transaction to the appellant. The proportionate swap cost on the outstanding swap contracts for the year ended 31 March 2001 worked out to Rs. 79,61,454/-. The AO has held that the appellant company debits this swap cost so incurred fully as expenditure in the current year itself instead of treating the proportionate cost on the swap deals whose maturity f alls beyond the balance sheet date as prepaid expenses.      7.2 From the above f acts, it is clear that the appellant is liable to pay the swap transaction cost to the counter party bank. The dispute here is only whether the assessee can debit the entire cost in this accounting year itself even though the period of the transaction spills over to the next ....

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....,74,020/- have been deleted by the ITAT (supra) and in respect of the additions pertaining to Disallowance out of claim of depreciation 1,20,00,948/- and Proportionate swap cost on the outstanding swap contracts of Rs. 79,61,454/-, the learned DR relied upon the order of the AO. 10. On the other hand, the learned counsel for the assessee, in so far as the disallowance of depreciation, submitted that the assessee neither concealed income nor filed any inaccurate p articulars of its income. It is submitted that before the ITAT the assessee was not pressed this issue because in this aspect the assessee went to the settlement commission and the settlement commission allowed the depreciation claim of the assessee. In so far as Proportionate swa....