AI Drafter 
TaxTMI 
TaxTMI 
2015 (7) TMI 1122
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.... and revenue, therefore, all the appeals were heard together and are now being disposed of by this consolidated order. 3. Rival contentions have been heard and record perused. The assessee is a company engaged in the business of setting up and running a hospital and has been expertise in management of health centres and facilities. During the course of scrutiny assessment for the assessment year 2005-06, the AO disallowed assessee's claim of club expenditure. It was brought to our notice by ld. AR that in the immediately preceding assessment year i.e. AY 2004-05, the Tribunal have allowed assessee's claim for club expenditure and against which the department has not filed any appeal before the Hon'ble High Court. We also found that the i....
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.... DCIT, 37 CCH 423(Del) viii) Avshesh Mercantile P. Ltd.,148 TTJ 607(Mum) ix) Shree Shamkamal Finance & Leasing Co. P. Ltd., 21 SOT 42 (Mum) and x) ACIT Vs. Lafarge India Holdings (P) Ltd.,19 SOT 121 (Mum) 6. It was further brought to our notice that assessee has acquired shares of Kanishka in order to acquire its land to build-up hospital on it. The investments were not made with the intention of earning dividend income nor any dividend was earned during the year as well as in future years. In these circumstances, by relying on the following the decisions, ld. AR contended that no disallowance should be made u/s.36(1)(iii) of the Act :- i) ACIT vs. Choice Trading Corp.Ltd., 90 ITD 1 ii) ....
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....or deciding afresh after considering the decision cited by the ld. AR in support of its contention that assessee is entitled for depreciation of management rights of Nagpur Hospital u/s.32(1)(iii) of the Act. 11. Ground NO.5 relating to disallowance of guarantee commission was not pressed by the ld. AR, therefore, the same is dismissed as not pressed. 12. As the issue with regard to claim of depreciation on management rights has been restored back to the file of AO, the ground taken by the assessee with regard to depreciation on guarantee commission is also hereby restored back to the file of AO for deciding afresh as per law. 13. The next issue is disallowance of interest of Rs. 96,16,870/- as interest free funds advanced to Kanis....
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.... 17. Since assessee's claim of allowing the interest expenditure was declined and held to be not revenue in nature, the alternative ground taken for allowing depreciation on the above interest expenditure capitalized by the AO, is restored back to the file of AO for deciding afresh. 18. The revenue in its appeal for A.Y.2005-06, is aggrieved by the order of CIT(A) for deleting disallowance of only incremental provision of leave encashment instead of full amount of provision. 19. From the record we found that the AO has made disallowance of closing balance of leave encashment amounting to Rs. 22,80,086/-, whereas the provision made during the year was only amounting to Rs. 5,11,625/-. We therefore, do not find any infirmity in the ord....
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.... case of Onward Technologies Ltd., ITA No.5235/Mum/2010. In view of these judicial pronouncements we do not find any merit for disallowance of employees' contribution of Rs. 55,519/-. 22. The grounds taken by the assessee with regard to disallowance of club expenses and interest paid on disallowance of borrowings are same as discussed for the assessment year 2005-06, hereinabove, therefore, the AO is directed to follow the reasoning given by us for the assessment year 2005-06. 23. The next grievance of the assessee relates to disallowance of interest expenditure u/s.14A amounting to Rs. 18,00,412/-. The AO applied rule 8D and computed the disallowance. It was brought to our notice that assessee's owned funds are more than the investme....