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2013 (4) TMI 752 - AT - Income TaxDisallowing the claim for deduction under section 35D for expenditure on public issue of equity shares - Held that:- Matter is restored back to the file of the AO for fresh adjudication after affording a reasonable opportunity of hearing to the assessee. Ground no.1 is allowed in part in favour of the assessee. Prior period expense - Held that:- Assessee had made submissions about pending rent payment and accrued interest on FDRs. As per the settled principles of taxation-jurisprudence, prior period expenses can be allowed in certain circumstances though they may not pertain to a particular AY for which return of income is filed.Crystalisation of expenses during a particular period is the deciding factor in such cases.We find that in the matter under consideration prior period expenses related to arrears of rent paid by the bank in respect of leased property and interest expenditure due to renewal of Fixed Deposits held by the FDR holders. The nature of expenditure is as such that some delay is bound to happen and crystalisation of such expenditure after 31st March of the AY.under consideration is natural Applicability of section 115 JB - Held that:- appellant is not a company under Companies Act but is only deemed to be a company as per the provisions of Sec. 11 of the Banking Companies (Acquisition and Transfer of Undertaking)Act,1970.Therefore as held by the Jurisdictional ITAT in the case of Maharashtra State Electricity Board [2001 (8) TMI 310 - ITAT MUMBAI] the provisions of Sec. 11 5JB cannot be made applicable to the appellant. Addition u/s 36(1) - Held that:- FAA had rightly directed the AO to calculate the bad debts and provisions in a particular manner,that section 36(1) of the Act allowed writing off of bad debts as well as provisions in certain circumstances. Applicability of section 88E while computing the income of the assessee as per the provisions of section 115JB - Held that:- Analysis of section 88E of the Act proves that where the total income of any assessee includes any income chargeable under the head Profits and gains of business/profession arising from taxable securities transaction,the assessee is entitled to a deduction from the amount of income tax on such transaction of an amount paid as STT. We agree with the view of the FAA that provisions of section 115JB deem the book profits to be income of the assessee and income tax on such book profits is payable at the rate provided in section115JB. Therefore,we are of the opinion that the amount tax paid as STT is income tax only and the reference to income tax in Section 88E includes the tax payable u/s. 115JB.In our opinion appellant-bank is entitled to the rebate of STT paid even if tax has to be calculated under MAT provisions
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