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2015 (1) TMI 1499 - AT - Income TaxEffect of filing of revised return - Disallowing additional loss to be carried forward on account of revised return - as alleged revised return was not filed within time allowed u/s 139(3) - HELD THAT:- The Hon’ble Allahabad High Court in the case of Dhamapur Sugar Mills vs. CIT [1972 (3) TMI 16 - ALLAHABAD HIGH COURT] held that the income tax act contemplates, the filing by the assessee of a correct and complete return of income. The law gives him a right to substitute and bring on record a correct and complete return of income, if he discovers any omission or wrong statement in the return originally filed by him. The law cannot contemplate making of assessment, on the basis of a return, which even the assessee claims contains a wrong statement. When the assessee files a revised return , he admits that the original return filed by him was not correct or complete and substitutes the same by a revised return which according to him is correct and complete. The effective return for the purpose of assessment is thus the return which is ultimately filed by the assessee, on the basis of which he wants his income to be assessed. DR could not cite any contrary judgment on this issue. Thus we hold that the findings of the first appellate authority that the return filed u/s 139(5) of the Act is not as per the provisions of law, for the reason that the mistakes were not inadvertent is bad in law. We also observe that, the AO has processed the revised return u/s 143(1)(a). The revised return has not been rejected by him. Under these circumstances, it is not appropriate for the CIT(A) to hold otherwise. Right of the assessee to carry forward of loss - As relying on Periyar District Co-operative Milk Producers Union Ltd. case [2004 (2) TMI 58 - MADRAS HIGH COURT] we allow the ground of the assessee by holding that the assessee can file a revised return claiming a higher amount of loss u/s 139(3) of the Act. Amount eligible for deduction u/s 80M - reducing notional interest expenditure from the dividend for calculation of deduction u/s 80M - HELD THAT:- A perusal of the chart demonstrates that the annual internal accruals are much higher than the investments made during that particular year. Under these circumstances the presumption is that the investments have been made from internal accruals and that no borrowed funds have been made for these investments. As decided in HDFC BANK LTD. [2014 (8) TMI 119 - BOMBAY HIGH COURT]) as relying on RELIANCE UTILITIES & POWER LTD. [2009 (1) TMI 4 - BOMBAY HIGH COURT] as assessee’s capital, profit reserves, surplus and current account deposits were higher than the investments in the tax free securities it would have to be presumed that the investments made by the assessee would be out of interest free funds available with the assessee. Disallowance of deduction of provisions for doubtful debts - HELD THAT:- After considering rival submissions we find that the issue is covered against the assessee by the judgment of Southern Technologies Limited [2010 (1) TMI 5 - SUPREME COURT] Respectfully following the same this ground of the assessee is dismissed. Disallowance of adhoc interest out of total interest paid during the year, on account of interest free loans, given to companies - AR contended that the assessee is a financial service company and in order to promote its business further, it had to undertake the entire gamut of financial services, and hence this subsidiary companies are formed, as the existing regulations required separate companies to be set up for this purpose - HELD THAT:- As the propositions based on which we had decided ground No. 3 of the assessee are applicable to the facts of the ground also. The assessee has led evidence to prove his case and hence the decision of the Jurisdictional High Court in the case of Motor General Finance Ltd. [2001 (12) TMI 62 - DELHI HIGH COURT] is not applicable as the facts are different. Thus respectfully following the preposition laid down in Reliance Utilities and Power Ltd.[2009 (1) TMI 4 - BOMBAY HIGH COURT] and the propositions laid down in the case of CIT vs. Bharti Televenture Ltd. [2011 (1) TMI 326 - DELHI HIGH COURT] we allow this ground of the assessee. Nature of expenditure - Disallowance of a claim of interest and old expenses as claimed as incurred during the year, but had been disclosed as deferred revenue expenditure in the books of the assessee - HELD THAT:- As the expenditure in question is undisputedly in the revenue field we apply the principles laid down in SBI Cards & Payment Services [2015 (1) TMI 202 - DELHI HIGH COURT] and allow the claim of the assessee. Depreciation in respect of commercial vehicles given on lease - Claim denied on the ground that the assessee is not engaged in the business running trucks on hire - HELD THAT:- Admittedly this issue is covered in favour of the assessee by the decision of Tribunal in the assessee’s own case for the asstt. [2007 (7) TMI 343 - ITAT DELHI-D] The prepositions laid down by the Tribunal in these decisions, are in consonance with, the propositions laid by the Jurisdictional High Court in the case of CIT vs. MGF (India) Ltd [2006 (7) TMI 125 - DELHI HIGH COURT] and M/s. ICDS vs. CIT [2013 (1) TMI 344 - SUPREME COURT] Disallowance of depreciation on assets which are purchased and leased back - HELD THAT:- Out of the six sale and lease back transaction, except in the case of PSEB and Oswal Sugars Ltd., the AO disallowed the depreciation by questioning the commercial expediency of the transaction. This ground of disallowances is not legally correct. When the genuineness of the transaction is not doubted, disallowance of depreciation is not warranted. The AO does not have the jurisdiction to question commercial expediencies and that too is in a transaction between unrelated parties. The assessee had filed a valuation report in support of his claim for deduction. The AO without considering the same, rejected the claim of the assessee. Such an act is against the prepositions laid down in the case of Ashwin Vanaspati Industries [2002 (1) TMI 40 - GUJARAT HIGH COURT]. Disallowance of the claim with regard to exclusion from income of principal amount recovered on lease transactions which were earlier considered as finance transactions by the AO - HELD THAT:- In the earlier asstt. years, the assessee had offered to tax, the lease rental received, including the principal portion, by treating the transactions in question as lease transactions. Lease transactions were considered as finance transactions by the AO and the depreciation claimed was disallowed. Consequently the principal portion of the lease transactions, which were offered to tax had to be reversed. The assessee’s claim is that such consequential benefit has to be allowed. The Ld. Counsel submitted that, he is not pressing this ground of appeal. In view of our decision in ground No. 8 where we accepted this claim of the assessee that these transactions are lease transactions. In the result this ground is dismissed. Finding of FAA that certain disallowance made by the AO and challenged by the assessee before it are not arising from the asstt. order - CIT(A) had held that the issue have not been discussed by the AO and do not emanate from in the asstt. order for the year under consideration. He dismissed the same - HELD THAT:- CIT(A) should have considered the claim of the assessee on merits. Hence we set aside the order to the file of the first appellate authority for fresh adjudication, on merit
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