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2016 (5) TMI 1259 - AT - Income TaxAddition of interest income as per CASS - assessee failed to include a sum of ₹ 1.50 lakh as interest income in its total income as shown in the CASS - Held that:- Assessee was following the mercantile system of accounting but the real income should be liable to tax irrespective method of accounting system followed by assessee. Unless the assessee actually charged the interest or interest in real terms accrued to the assessee, it cannot be brought to tax merely on the ground that the assessee follows mercantile system of accounting. - Decided in favour of assessee. Addition of the expense including the interest disallowed u/s. 14A r.w.s 8D of the IT Rules in computing the book profit u/s. 115JB - Held that:- No addition to the book profit shall be made on account of alleged expenditure incurred to earn exempt income while computing income u/s115JB of the Act. See Quippo Telecom Infrastructure Ltd. case [2011 (2) TMI 1400 - ITAT DELHI ] - Decided in favour of assessee. Non reducing the lower of loss brought forward or unabsorbed depreciation as per books of account while computing the book profit u/s 115JB - Held that:- As per the provision of law, assessee is entitled to claim the deduction for lower of the amount either loss brought forward or unabsorbed depreciation. We accordingly direct the AO to allow the loss brought forward or unabsorbed depreciation whichever is less as per books of account of the assessee in terms of clause (iii) u/s 115JB of the Act. This ground is allowed in favour of assessee Charging interest u/s 234B/C - Held that:- Additions have been made to the total income of assessee as a result of retrospective amendment in the Statute and assessee paid the tax. But there will be no interest on the aforesaid addition made u/s 234B and 234C in view of the aforesaid judgment of jurisdictional High Court in the case of Emami Ltd. (2011 (6) TMI 163 - CALCUTTA HIGH COURT ). Accordingly we reverse the orders of Authorities Below and delete the addition made by AO.- Decided in favour of assessee. Addition to the book profit u/s.115JB being Provision for NP and Provision for Dimunition in value of investments - Held that:- We find that the diminution in the value of investment is not permanent in nature. The value of investment made in the shares and securities keep on changing depending upon the market rate. Therefore, there can be a case for a particular year that there will be diminution in the value investment but in the next year but there will be appreciation in the value of investment. So we should not consider the diminution and appreciation in the value of investment unless it is not permanent in nature. In this connection, we find that the Institute of Chartered Accountant of India in terms of its Accounting Standard 13 has recommended to identify the loss in the books on account of diminution in the value of investment until and unless it is permanent in nature. The action taken by Authorities Below in connection the diminution in the value of investment is correct and within the ambit of law. Hence, we confirm the order of lower authorities with regard to addition made by Authorities Below under clause (i) to the Explanation of Sec. 115B of the Act as far as Investment is concern. This ground of assessee’s appeal is partly allowed.
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