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2015 (1) TMI 1286 - AT - Income TaxDisallowance of bank charges and interest by invoking the provisions of 14A - Held that:- As far as interest and bank charges of ₹ 12,20,049/- the assessee contested that the entire secured loan has been utilized for acquisition of capital assets relating to business of mining and sale of coal where the assessee’s turnover is more than ₹ 45.73 cr. We find from the accounts of assessee that it has been demonstrated by Ld. Counsel for the assessee that the major secured loans were utilized for the purpose of acquisition of assets relating to mining business and interest paid to the bank is for the purpose of business and not for the purposes of acquiring assets giving exempted income. Accordingly, we are of the view that the CIT(A) has rightly made disallowance of interest and bank charges to the tune of ₹ 12,20,049/- and we confirm the same Disallowance made on account of provisions for bonus u/s. 43B - Held that:- As per the provisions of section 43B of the Act, the provision for bonus is to be allowed as a deduction in the year of actual payment and not otherwise. Once the provision is not allowed as deduction, the right back of the provision for bonus cannot be treated as income. In term of the above, we confirm the order of CIT(A) and this issue of revenue’s appeal is dismissed. Disallowance for provision of leave encashment - Held that:- Deduction on account of provision of leave encashment was made on the basis of the judgment of Hon'ble jurisdictional High Court in the case of Exide Industries Ltd. Vs. Union of India (2007 (6) TMI 175 - CALCUTTA High Court ) wherein it was held that insertion of clause (f) in section 43B is unconstitutional. Subsequently, the Hon’ble Apex Court [2008 (9) TMI 921 - SUPREME COURT ] has stayed the operation of this judgment of the Hon’ble Calcutta High Court rendered in the case of Exide Industries Ltd. v. UOI (supra) and therefore, the order of the ld. CIT (Appeals) by following this judgment of the Hon’ble Calcutta High Court cannot be approved. Thus we set aside this issue to the file of the AO to await the decision of Hon'ble Supreme Court and decide the issue accordingly. This issue of assessee’s cross objection appeal is remitted back to the file of AO and allowed for statistical purposes.
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