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2019 (10) TMI 124 - AT - Income TaxDisallowance of interest on disputed Govt. duty (Electricity Duty and water charges - HELD THAT:- As decided in own case [2018 (6) TMI 1662 - ITAT CUTTACK] we direct the AO to allow assessee’s claim of interest insofar as assessee is also offering interest on the amount deposited in the bank account. When interest on such deposit is brought to tax, there is no reason for disallowing interest payable to Government for non-payment of such duty in Government account. The reasoning given by the AO for disallowing interest on non/delayed payment of water charges are that it was a contingent liability. We found that Tribunal in assessee’s own case in earlier years had allowed this claim under similar circumstances and held that interest on unpaid electricity duty and water charges is fully allowable u/s.37 of the Act and provisions of Section 44A of the Act for disallowance is not attracted. It is pertinent to mention here that the ITAT Cuttack Bench in the case of NALCO in the combined order has held that interest on disputed Electricity Duty are allowable u/s.37 of the Act and further the interest on Electricity Duty, even if a statutory liability, the same do not fall under the ambit of Section 43B of the Act and therefore, even if such interest is not paid the same is not to be disallowed under section 43B. Following the reasoning given hereinabove with regard to the interest on delayed payment of electricity bill, we direct the AO to allow interest on the water bill. Disallowance of provision for leave encashment u/s.43B - HELD THAT:- As decided in own case [2018 (6) TMI 1662 - ITAT CUTTACK] wherein the Tribunal has restored the issue to the file of AO to examine and allow the claim of the assessee. Disallowance u/s.14A r.w.Rule 8D - HELD THAT:- Assessing Officer has considered average total investment appearing on the first day and last day of the financial year, which in our opinion is not justified. These investments may also include such investments from which no exempt income would have been earned by the assessee. As is clear from the Rule itself, the average of only such investments have to be taken into account, which yielded the income not forming part of the total income. AO was required to work out the average of such investment, the income from which did not form part of the total income instead of total value of investment. For this view, our stand is fortified by the decision of ACIT vs. Vireet Investment (P) Ltd., [2017 (6) TMI 1124 - ITAT DELHI] . None of the parties before us, however, have laid any details to examine as to which of the investments have yielded such income which did not form part of the total income. We, therefore, restore the matter back to the file of the Assessing Officer for calculating the disallowance u/s. 14A read with Rule 8D afresh, in the light of observations made in the body of this order above. Accordingly, ground No.4 is allowed for statistical purposes. Treatment of Short Term Capital Gains - not accepting Loss under Long Term Capital Gains and treating the same as ‘Business income’ - HELD THAT:- As decided in own case [2018 (6) TMI 1662 - ITAT CUTTACK] we direct the AO to accept the loss under long term capital gains and treat the income under the capital gains instead of business income. Additional Depreciation u/s.32(i)(iia) - AO disallowed the same on account of the fact that the assessee could not produce the particulars/details of actual cost during the course of assessment proceedings - HELD THAT:- CIT(A) has already remitted the issue to the file of AO to allow the claim of the assessee after verification of necessary details. Therefore, any order/direction by us, at this stage, on this issue, would be futile exercise. However, a reasonable order is expected from the AO on the above observations of CIT(A). Disallowance of the loss claimed on account of re-valuation of non-moving stores and spares - HELD THAT:- As decided in own case [2018 (6) TMI 1662 - ITAT CUTTACK] in favour of the assessee and against the Revenue relying on the decision of the Tribunal in assessee’s own case for the earlier assessment years. We follow the same reasoning given in the aforesaid appeal and we do not see any reason to interfere with the order of the CIT(A), who has passed a reasoned.
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