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2016 (9) TMI 110 - HC - Income TaxEntitlment to claim interest paid on borrowed capital - Held that:- No distinction in Section 36(1)(iii) between ‘capital borrowed for a revenue purpose’ and capital borrowed for capital purpose’ and an assessee is entitled to claim interest paid on borrowed capital provided that capital is used for business purpose irrespective of what may be result of using such borrowed capital. Allowabilty of payment of surtax - Held that:- This Court in the case of Gujarat State Export Corporation Ltd. (1993 (9) TMI 52 - GUJARAT High Court) has held that payment of surtax was not an allowable deduction and that by paying the entrance fee to the sports club the assessee had no intention to acquire any capital asset or take advantage for the enduring benefit of the business and that by common sense standards, it could be stated that it was for running the business or for bettering the conduct of its business and therefore the amount paid as entrance fee was deductible. In view of the said decision, we find that the question raised is required to be answered in favour of the assessee. Addition for provisions made for bad and doubtful debts - Held that:- As in the case of Yokogawa India Ltd. (2011 (8) TMI 766 - KARNATAKA HIGH COURT ), the Karnataka High Court has held that while computing book profits, provisions made for bad and doubtful debts cannot be added back in accordance with Explanation (c ) to Section 115JB(1) as same is not an ascertained liability. In that view o the matter, we are of the opinion that the Tribunal was justified in confirming the order of CIT(A) deleting the addition. We do not see any reason for interference and therefore we answer the question in favour of assessee and against the revenue MAT computation - payment to L & T towards excise duty - Held that:- CIT(A) directed to allow the expenditure on payment to L & T towards excise duty as revenue expenditure and the remaining expenditure incurred on payment to GAIL and expenditure on cell membranes were held as capital expenditure. On further appeal by the assessee before the Tribunal, the Tribunal directed to allow the entire expenditure as revenue expenditure but directed to allow the same on deferment basis as claimed by the assessee. The Tribunal also allowed deduction u/s 80HHC while computing the book profit u/s 115JA.
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