TaxTMI 
TaxTMI 
2016 (4) TMI 750
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....the cruxes of the issues are as follows:- i) The learned Commissioner of Income Tax (Appeals) has erred in confirming the order of the learned Assessing Officer wherein the learned Assessing Officer had treated the amount of Rs. 6,31,047/- (being the interest received under section 244A in regard to interest on refunds due from the Revenue) as the income of the assessee though the Department was on appeal before the Hon'ble High Court against granting such interest by the Tribunal to the assessee. ii) The learned Commissioner of Income Tax (Appeals) has erred in confirming the order of the learned Assessing Officer, wherein the learned Assessing Officer had made addition of Rs. 1,77,43,075/- being the disallowance of prepayment premium....
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....uting the taxable income of the assessee following the mercantile system of accounting. The learned Assessing Officer did not accept the contentions of the assessee and brought the same under the ambit of tax. The learned Commissioner of Income Tax (Appeals) also confirmed the order of the learned Assessing Officer. 5. The learned Authorized Representative cited several decisions and argued stating that the interest received has not crystallized and therefore it cannot be treated as income of the assessee during the relevant assessment year. However, we find the decisions cited by the learned Authorized Representative are distinguishable from the facts of the case. 6. We have heard both the parties and carefully perused the materials avai....
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....ss account an amount of Rs. 3,80,56,306/- as deferred revenue expenditure. It was explained by the assessee that it had obtained loan from IDBI, IFCI limited and UTI for its power plant project @ 16% per annum approximately being the rate prevailing at the time of disbursement of loan. Subsequently, the rate of interest started declining. Therefore, the assessee approached the aforesaid institution seeking interest rate to 10%. All the aforesaid financial institutions acceded to the request of the assessee and agreed to reduce the interest rate @ 10% per annum against payment of premium of Rs. 3,80,56,306/- upfront which the assessee complied. It was therefore submitted that the expense of Rs. 3,80,56,306/- has crystallized during the relev....
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....nt assessment years. Moreover it is pertinent to mention that the balance period of the term loan and the income attributable to the savings in interest is ascertainable unlike in the case of deferred revenue expenditures where such period and the benefit derived in the succeeding years are not ascertainable. Therefore, the learned Assessing Officer is right in making such disallowance which is further confirmed by the learned Commissioner of Income Tax (Appeals). However, we hereby modify the orders of the Revenue, by directing the learned Assessing Officer, to ensure that the entire amount of Rs. 3,80,56,306/- be proportionately apportioned to the relevant period for which the benefit in quantum of reduction of interest is enjoyed by the ....