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2019 (1) TMI 1961 - MADRAS HIGH COURTEntitlement to deduction of lease equalisation charge - whether the deduction on account of lease equalisation charges from lease rental income can be allowed under the Income Tax Act, 1961, on the basis of Guidance Note issued by the Institute of Chartered Accountants of India (ICAI)? - HELD THAT:- As decided in VIRTUAL SOFT SYSTEMS LTD. [2018 (4) TMI 1472 - SUPREME COURT] it is wrong to say that the Respondent claimed deduction by virtue of Guidance Note rather it only applied the method of bifurcation as prescribed by the expert team of ICAI. Further, a conjoint reading of Section 145 of the IT Act read with Section 211 (un-amended) of the Companies Actmake it clear that the Respondent is entitled to do such bifurcation and in our view there is no illegality in such bifurcation as it is according to the principles of law. Moreover, the rule of interpretation says that when internal aid is not available then for the proper interpretation of the Statute, the court may take the help of external aid. If a term is not defined in a Statute then its meaning can be taken as is prevalent in ordinary or commercial parlance. Hence, we do not find any force in the contentions of the Revenue that the accounting standards prescribed by the Guidance Note cannot be used to bifurcate the lease rental to reach the real income for the purpose of tax under the IT Act. We are of the view that the Respondent is entitled for bifurcation of lease rental as per the accounting standards prescribed by the ICAI. Moreover, there is no express bar in the IT Act regarding the application of such accounting standards. - Decided against revenue. Levy of interest u/s 234D - HELD THAT:- The issue is settled by the judgment of the Supreme Court in the case of Commissioner of Income Tax -I V. Reliance Energy Ltd. [2013 (10) TMI 280 - SUPREME COURT] wherein the Supreme Court holds that the provisions of section 234D would be attracted in the case of assessments made after the date of its insertion, being 01.06.2003. In the instant case, the orders of assessment for Assessment Years 1999-2000 and 2002-03 are 18.03.2005 and 31.03.2005, both being subsequent to 01.06.2003. Accordingly, the provisions of section 234D would stand attracted in both cases. Decided against the assessee.
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