TaxTMI 
TaxTMI 
2021 (7) TMI 1380
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.... and on facts in upholding disallowance of interest aggregating Rs.24,34,72,443/- due and payable to the Government of India and in directing that the deduction be allowed not on accrual but on actual payment of the interest." 3. In ITA No. 319/Del/2001, following grounds have been raised by the assessee: "1. That the ld. CIT (A) has erred in law and on facts in confirming disallowance of interest payable to the Government of India amounting to Rs.23,79,41,269/- 2. That the ld. CIT (A) has erred in law and on facts in upholding disallowance of depreciation on Westland Helicopters amounting to Rs.57,60,034/-." Interest due to Government of India: 4. The brief facts of the case are that Pawan Hans Limited (initial named as Helicopter C....
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....see was required to deposit the rupee equivalent computed at basic conversion rates of the foreign exchange payments released upto the period ended 31.3.1990 amounting to Rs.2,48,25,01,590/- into the Government treasury. The assessee could, however, deposit only Rs.1,02,87,44,072/- leaving a shortfall of Rs. 1,45,37,57,518/-. The balance is appearing in the balance sheet. The interest due at the prescribed rates along with commission and incidental charges @ 1% advalorem and crown agent charges amounting in all to Rs. 26,95,58,643/- for the year and Rs.71,75,42,855/- (Net) till 31st March, 1990 has not been provided in the accounts as the Ministry of Civil Aviation had requested the Ministry of Finance to waive the interest on such belated ....
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....nter rupee fund immediately in view of this claim of deduction should be treated as valid as it is an ascertained liability. The Assessing Officer held that the actual liability for the year has been verified by statutory and Comptroller and Auditors General of India (CAG) and held that the claim is not admissible for the following reasons: a) The amount has not been provided for in the accounts. b) The liability has not been ascertained during the year under consideration as the company had applied for the waiver of this interest. c) The bifurcation of this sum under interest, inventory and counter rupees has not been provided by the company. Even in the letter of Ministry of Finance dated 27.05.1997, the actual amount to be deposite....
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.... the Income Tax Act 1961. The ld. DR strongly relied on the order of the authorities below. 14. Heard the arguments of both the parties and perused the material available on record. 15. In the present case, the assessee has taken the loan in the year 1986-87 and interest during that period was also allowed to the assessee as is evident from the assessment order and no disallowance has been made by the revenue. Further, no disallowances were made in A.Y. 1988-89 and A.Y. 1989-90 as is evident from the assessment orders. It is only then in AY 1990-91, in the impugned assessment year the AO has made the disallowance. It is also pertinent to note that subsequently also in A.Y. 1993-94, A.Y. 1994-95, A.Y. 2000-01 and A.Y. 2001-02 similar expen....
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....as not used in the current year. 18. The ld. CIT (A) confirmed the disallowance. 19. The facts in the instant case that the helicopters were acquired in 1986-87 and the assessee has been claiming the depreciation since then has not been in dispute. The AO has allowed the depreciation on helicopters in the earlier assessment years. This fact is also not disputed by the AO as well as CIT(A). Further, the assessee is following the concept of block of assets which were also not in qualm by the revenue. 20. 'Block of Assets' as defined by section 2(11) means, group of assets falling within a class of assets, comprising- (a) tangible assets, being buildings, machinery, plant or furniture; (b) intangible assets, being know-how, pate....