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2015 (2) TMI 894 - AT - Income TaxAdditional deduction u/s 35(2AB) disallowed - no inhouse scientific research has been carried out by the appellant - Held that:- Merely getting approval from ARAI and purchasing certain material from the market cannot be said to be carrying out in-house research & development activity. Research & development means to carry out research to find out some new technology or new equipment or product and that should be carried out in-house as per the requirement of section 35(2AB) of the Act. The assessee has failed to justify his claim of in-house scientific research carried out and therefore, no deduction under section 35(2AB) is admissible to the assessee. - Decided against assessee. Disallowance of interest paid on loans - CIT(A) directing the assessing officer that interest from FDs be assessed under the head Income from Other Sources - Held that:- The disallowance made by the Assessing Officer was ₹ 63,61,399/- being the difference in these two figures. Since the assessee could not establish that borrowings were for business purposes, deduction is not allowable u/s 36(1)(iii) of the Act and moreover, u/s 57(iii) also, deduction is already allowed by the Assessing Officer to the extent of interest income and entire interest expenditure cannot be allowed because it could not be established by the assessee that the borrowing was made for making investment in FDR by showing direct nexus between the borrowing from bank and making FDR in bank. Considering all these facts, we do not find any reason to interfere in the orders of the authorities below. - Decided against assessee. Disallowance of Bad and Doubtful Debts, Advances and others written off - Held that:- a clear finding is given by CIT(A) that the assessee has not written off bad debts in question and assessee has credited the amount to the account with the heading ‘provision for doubt debts.’ As per the provision of section 36(1)(vii), bad debt is allowable on actual write off and not on provision and hence, we do not find any reason to interfere in the order of CIT(A) on this issue - Decided against assessee. Fees to Registrar of Companies for enhancement of authorized capital - revenue expense v/s Capital expenditure - Held that:- The amount in question was debited by the assessee in the profit & loss account in the present year, the same is not allowable as deduction in view of these judgments of Hon'ble Apex Court in the case of Brooke Bond India Ltd. vs. CIT [1997 (2) TMI 11 - SUPREME Court] and Punjab State Industrial Development Corporation Ltd. vs. CIT [1996 (12) TMI 6 - SUPREME Court]. However, if the assessee can show that the cheque in question was not encashed by the ROC and reverse entry was passed by the assessee in the next year and the corresponding amount was taken by the assessee as income in the next year then in the next year, the same should not be taxed.- Decided against assessee. Payment of gratuity paid under the scheme of LIC - disallowance invoking the provisions of sec.40A(7) - Held that:- Since the issue is covered against the assessee by the Tribunal decision in assessee’s own case for assessment year 2002-03 and 2003-04 [2014 (8) TMI 767 - ITAT LUCKNOW] we do not find any reason to take a contrary view - Decided against assessee. Disallowance of interest subsidy on housing loan - non deduction of TDS - Held that:- in assessee’s own case for assessment year 2002-03 and 2003-04, this issue was decided in favour of the assessee and it was held that the interest subsidy to the employees is for maintaining harmonious relationship and welfare of the employees, which is nothing but business expenditure. Respectfully following this Tribunal decision in assessee’s own case, we hold that in the present year also, this disallowance is not justified. - Decided in favour of assessee. Unreconciled bank balance in the bank account - addition of ₹ 53,000/- - Held that:- there was a difference of ₹ 53,000/- as unreconciled bank balance in the bank account at Chennai for which no explanation was furnished by the assessee before the Assessing Officer or CIT(A). Even before us, no explanation has been furnished and therefore, we do not find any reason to interfere in the order of CIT(A) on this issue. - Decided against assessee.
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