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2013 (11) TMI 1234 - AT - Income TaxAllowability of interest expense on debenture - accrual of interest liability - Such payment was made on 24/03/1995, i.e. the date of allotment in that case, hence the funds were used in that case for only a few days during AY 1995-96. In spite of this, the assessee in that case claimed deduction for the entire amount of interest paid on the date of allotment. The argument on behalf of the Revenue was that this interest should accrue on day-today basis - Held that:- the entire interest payment made in the initial year of allotment cannot be artificially spread over the period of six years for the purposes of allowing deduction. - no part of this interest expenditure is disallowable whether it is covered by 43B or not. - Decided in favor of assessee. Project expenses written off - Held that:- in the interest of justice, this matter should go back to the file of CIT(A) for a clear finding regarding the facts - matter remanded back. Depreciation on Wind Turbine Generating Sets - Held that:- the term “use” has a wide connotation and even trial production of a machinery would fall within the ambit of “used for the purpose of business”. It was also held that the Statute does not prescribe a minimum time-limit for use of the machinery and hence the assessee cannot be denied the benefit of depreciation on the ground that the machinery was used for a very short duration for trial run - Decided against the revenue. Depreciation on machinery purchased and leased by the assessee - Held that:- even the transaction is apparently genuine as the equipment was purchased by M/s.PIL from TISCO. Thus, it would not be proper to disallow the depreciation claimed on these assets in respect of which sale and lease back transaction was entered into. The claim of the appellant is, therefore, allowed - Decided against the revenue. Interest expenses - disallowance of claim under sec.43B - Held that:- BIFR is only to consider various extra benefits to be allowed to the assessee which is sick company, but not for curtailing any benefit allowable to the assessee as per law. Since there is no question raised by the ld.DR of the Revenue regarding allowability of the claim of the assessee as per law, the same cannot be denied to the assessee on the basis of a letter of Directorate Income-tax before BIFR which is also agreed by the assessee before BIFR - Decided against the revenue. Deduction u/s 80M - Held that:- t in addition to receiving eight dividend warrants, the decision making is also required as to whether the investment is to be retained or to be sold out and, therefore, some expenses had to be reduced from dividend income on account of administrative expenditure, etc. But in our considered opinion, estimate of the AO at 5% of the dividend income is excessive and considering the facts of the present case, we are of the opinion that 0.5% expenditure will be sufficient to take care of administrative and management expenses in respect of dividend income. - Decided partly in favor of revenue.
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