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2023 (7) TMI 1148 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - HELD THAT:- By respectfully following the above ratio in 24/08/2020 passed in ITA No. 1947/Del/2018 [2020 (9) TMI 141 - ITAT DELHI] and also considering the fact that the investment in shares of Karnataka Bank Limited has been made out of own funds of the assessee, we hold that no disallowance can be made out of interest expenditure under Clause (ii) of Rule 8D of the Rules. Disallowance of depreciation on vehicles given on finance lease - HELD THAT:- Hon'ble Supreme Court in the case of ICDS Ltd. [2013 (1) TMI 344 - SUPREME COURT] as reaffirmed the position that in a leasing transaction it is the lessor and not the lessee, who is entitled to claim deprecation on the leased assets - A.O. disallowed the excess claim of depreciation over and above the excess income - Disallowance of depreciation claimed on vehicles give on finance lease requires to be deleted. Ad-hoc disallowances of support service fee and reimbursement of expenses - HELD THAT:- Considering the fact that the CIT(A) had observed in its order that payment has not been wholly and exclusively for the purpose of business of the assessee without referring to the documents produced by the assessee we are of the opinion that, if the issue involved is remanded to the file of CIT(A) for adjudicating the same afresh after considering all the documents produced by the Assessee, the substantial issue of the assessee is remanded to the file of CIT(A) with a direction to adjudicate the issue afresh after verifying the documents produced by the assessee in accordance with law. Disallowance of bad debts written off - HELD THAT:- As decided in own case [2022 (7) TMI 374 - ITAT DLEHI] on a careful consideration of the matter and analyzing the facts in the light of the addition of the Hon’ble Apex Court in the case of Vijaya Bank [2010 (4) TMI 46 - SUPREME COURT] we are of the considered opinion that in this matter the assessee not only debited the amount of doubtful debt to the P&L Account but in fact registered the value of assets in the Balance Sheet, and therefore we find that it’s not the case of mere creating provision but actual writing off of the bad debts, and accordingly the assessee is entitled to the deduction under section 36(1)(vii). Disallowance of interest on compulsory convertible debentures - whether the compulsory convertible debentures are in the nature of debt or equity? - HELD THAT:- The Hon’ble Rajasthan High Court in the case of CIT Vs. Secure Meters Ltd. [2008 (11) TMI 66 - HIGH COURT RAJASTHAN] held that the expenses incurred on issue of debentures, whether convertible or not, were deductible as business expenditure under section 37(1) of the IT Act. The Court held that the debenture when issued is a debt, and therefore, whether it is convertible or non-convertible does not militate against the nature of the debenture. Thus we hold that CCDs are in the nature of borrowed fund and continued to be debt till conversion thereof into shares and consequently interest on CCDs is allowable as revenue deduction u/s 36(1)(iii) of the Act.
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