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2014 (1) TMI 188 - ITAT DELHIDisallowance of reversal of income – Held that:- The Assessing Officer has reproduced the relevant portion of the minutes from which it is evident that the assessee is entitled to overhead charges of one and half percent on the computed cost of the project - The computed cost of the project would include cost of the entire project including general pool accommodation – Decided against assessee. Prior period expenditure – Held that:- It is a settled law that when the assessee is following mercantile system of accounting, the prior period expenses can be allowed in the subsequent year in which such expenses have crystallized - none of the lower authorities had examined this aspect - The assessee has also not given complete details of the prior period expenses and has not explained how such expenses have crystallized during the accounting year relevant to the assessment year under consideration – The issue was restored for fresh adjudication. Interest accrued but not due on foreign loans – Held that:- Following assessee's own case for AY 2001-02 - Interest accruing on loans obtained in foreign currency from Asian Development Bank and Japan Bank of International Cooperation is deductible in computing the income even though it has not become payable - Whether liability did not crystallize in the year under consideration or not, the interest is deductible since the assessee is following mercantile system of accounting - Following Bharat Earth Movers Vs. CIT [2000 (8) TMI 4 - SUPREME Court] - Deduction of interest accrued on such foreign loans is allowable – decided in favour of assessee. Financial charges written off – Held that:- Following assessee’s own case for earlier years - Assessing Officer had not examined the issue in the light of material filed before him - He has simply disallowed the claim of the assessee on the grounds that the relevant details were not filed by the assessee - The matter was restored to the file of the AO for fresh adjudication. Depreciation on assets added to the block after 30.09.2001 – Held that:- Following assessee’s own case for earlier year - Hundred per cent depreciation is deductible on books owned by lending libraries and professionals, the rate of 60% is applicable in respect of other cases - The assessee is neither a lending library nor a professional, it is held that the learned CIT(Appeals) was right in allowing depreciation @ 60% – Decided against assessee. Depreciation on estimated increase in cost of properties – Held that:- It is a settled law that depreciation is to be allowed on the actual cost of assets to the assessee and not on the basis of enhanced cost of the assets on estimate basis – Decided against assessee. Disallowance u/s 14A – Held that:- Following Maxopp Investment Ltd. & Ors. Vs. CIT – [2011 (11) TMI 267 - Delhi High Court] – The issue was restored for fresh adjudication.
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