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2016 (8) TMI 1202 - ITAT DELHIAllowability of claim of depreciation on the leased vehicles - Held that:- Relying on the decision of Supreme Court in the case of ICDS Ltd. VS. Commissioner or Income Tax. [2013 (1) TMI 344 - SUPREME COURT] the Lessor is entitled for claim of depreciation of vehicles which are given on lease. - Decided in favour of assessee. Addition on account of interest on sticky loans and advances - Held that:- This issue has been settled by the decision of the ITAT in assessee’s own case for AY 2000-01, 200203 and 2003-04 as held under the mercantile system of accounting an income accrues when there is reasonable certainty for realising any receipts or revenue. Hypothetical income cannot be taken into account. In respect of sticky loans and advances, the income is recognized when interest is actually collected. Merely on the basis of accrual it cannot be recognized in the absence of any certainty of its collection.- Decided in favour of assessee. Disalowance towards provision for doubtful debts made by the appellant in pursuance with mandatory prudential norms issued by Reserve Bank of India - Held that:- This issue is covered against the assessee by the decision of Southern Technologies Vs. JCIT [2010 (1) TMI 5 - SUPREME COURT OF INDIA] held that the object of the Directions that non-banking financial companies have to accept the concept of "income" evolved by the Reserve Bank of India after deducting provision against non-performing assets is only disclosure and provisioning and such treatment is confined to presentation/disclosure and has nothing to do with computation of taxable income under the Income-tax Act. Provision for nonperforming assets in terms of the Directions of the Reserve Bank of India does not constitute "expense" on the basis of which deduction can be claimed by the non-banking financial companies under section 36(1)(vii) of the Act. - Decided against assessee. Disallowance towards claim for bad debts written-off by the appellant in its books of account - Held that:- Since the assessee had not furnished the details before the AO, therefore, we restore this matter to the file of AO to examine the basic ingredients of section 36(2) whether fulfilled or not. There is no dispute that debt has been written off. Further, we may clarify that AO will not go into the issue whether the debt had become irrecoverable or not in view of the decision of Hon’ble Supreme Court in TRF Ltd. (2010 (2) TMI 211 - SUPREME COURT). With these observations, the issue is set aside to the file of AO. Ground is allowed for statistical purposes. Levy towards interest charged u/s 234D - Held that:- We restore this matter to the file of AO to verify whether any refund was granted to assessee or not and, if, no refund was granted to assessee then no interest can be charged u/s 234D. Ground is allowed for statistical purposes. Loss on sale of loan portfolio - Held that:- Ld. counsel has rightly pointed out that had there been direct loss or repossession of assets then the loss would have been allowed. Therefore, on the same footing loss arising out of sale of delinquent assets portfolio also is to be allowed. Admittedly, assessee had right to receive money from its debtors on account of financing of assets. This right had accrued in favour of assessee in ordinary course of business and not on capital account. Further, we are in agreement with ld. counsel for the assessee that the conditions laid down u/s 36(1)(vii) read with section 36(2)(i) are also fulfilled because the debt or loan was in respect of a business which was carried on by the assessee in the relevant accounting year.The debt represented money lent in the ordinary course of the business, which was akin to money lending and The amount was written off as irrecoverable in the accounts of the assessee for that accounting year in which the claim for deduction was made for the first time. - Decided in favour of assessee
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