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2016 (8) TMI 1441 - HC - Income TaxComputation of income - Whether the Tribunal erred in holding that interest paid by the appellant u/s 234B, 220(2) and 215 cannot be allowed as deduction in computing its total income? - HELD THAT:-The issue raised herein stands concluded against the applicant assessee and in favour of the Revenue by the decision of the Apex Court in Bharat Commerce and Industries Ltd. Vs. Commissioner of Income Tax [1998 (3) TMI 2 - SUPREME COURT] . The Apex Court has held that interest payable for delayed payment of Income Tax cannot be allowed as deduction in computing the total income. Depreciation on matured investments - real income theory - appellant assessee treated these securities as non performing assets and sought depreciation in their value by making provision in its accounts in terms of Reserve Bank of India guidelines - AO held that securities were due for redemption and the amount payable is already determined also confirmed by CIT-A and ITAT - HELD THAT:- Tribunal has approved the observations of the CIT(A) that the real income theory cannot be so extended so as to negate accrual of an amount which is receivable by the appellant assessee. In support, reliance is placed upon the decision of this Court in Navin R Kamani Vs. Commissioner of Income Tax [1990 (3) TMI 40 - BOMBAY HIGH COURT]. The concept of real income theory cannot be read so as to defeat the provisions of the Act. Further, the fall in value of security is not an ascertained liability and such adhoc deduction cannot be allowed. The impugned order places reliance upon the decisions of the Apex Court in Indian Molasis Company Pvt. Ltd. Vs. Commissioner of Income Tax [1959 (5) TMI 5 - SUPREME COURT] and of this Court in Standard Mills Company Vs. Commissioner of Income Tax [1997 (3) TMI 64 - BOMBAY HIGH COURT] - no substantial question of law arises The appeal is Admitted on question nos. (b) and (c). (b) Whether the Tribunal ought to have held that interest of ₹ 425,42,37,785 paid by the appellant under Sections 234B, 220(2) and 215 of the Act should be set off against the interest received by it on income tax refund and only the interest paid in excess of the interest received could be disallowed? (c) Whether the Tribunal erred in holding that the appellant is not entitled to depreciation of ₹ 312,50,000 on assets purchased by it from KRCL ?
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