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2020 (2) TMI 103 - AT - Income TaxDisallowance of interest - HELD THAT:- Considering the consistent decision of co-ordinate bench, wherein similar interest disallowance was directed to be deleted, therefore, we direct the Assessing Officer to delete the disallowance Disallowance of bad-debt - HELD THAT:- Statement of fact filed before the ld. CIT(A), the assessee has specifically stated in the fact related to ground no.2 that interest accrued on the advance to Arcot Finance Ltd. was offered to tax. In our view, the assessee has fulfilled the condition and discharge its onus by specifically pleading that interest accrued on the write off amount was shown in earlier years. We have also noted that the assessee has clearly stated that the write off amount relates to interest and that principle amount was already paid. It is settled law that no suit lie for recovery of interest. We have further noted that the assessee was allowed write off of claim in respect of other debtor. Therefore, in view of the aforesaid discussion, we direct the Assessing Officer to delete the disallowance Disallowance out of interest on account of interest free advances - HELD THAT:- When in earlier year also, the interest has not been allowed, the action of Assessing Officer was not justified in disallowance of interest in respect of Cifco Travel & Cifco Properties. In view of the aforesaid discussion and keeping in view that substantial interest disallowance has been deleted by Assessing Officer while giving effect to the order of ld. CIT(A). Therefore, we direct the Assessing Officer to delete the entire disallowance. Depreciation by treating the lease agreement with Kores India Ltd. as a financial agreement - HELD THAT:- We have noted that the lower authority has not disputed the ownership of leased asset. In AY 1995-96, there was a limited dispute about the date of put to use. Even otherwise, the dispute for AY 1994-96 was settled under KVSS, and it would not take any right of the assessee for taking up the issue in subsequent years. We have further noted that the assessee has placed on record sufficient material showing ownership of leased asset. The Hon’ble Supreme Court in ICDS Ltd. vs. CIT [2013 (1) TMI 344 - SUPREME COURT] held that when assessee purchased vehicles from manufacturers (asset) and leased out those asset to customers, it was entitled to claim depreciation in respect of vehicles so leased out. Considering the decision of Hon’ble Supreme Court, we direct the Assessing Officer to allow the depreciation on leased asset i.e. Induction Melting Furnace leased to Kores India Ltd. Depreciation on leased asset - HELD THAT:- As perused the record including various documentary evidence furnished in respect of lease asset including lease agreement, transportation, installation, insurance policy and photographs of leased equipments. We have further noted that this issue is similar to the ground taken in Ground No. 5a to 5c, which we have allowed by following the decision of Hon’ble Supreme Court in ICDS Ltd. [2013 (1) TMI 344 - SUPREME COURT] . Therefore, this ground of appeal is also allowed with similar observation. Taxing profit on sale of shares of Panchmahal Cement Ltd. - HELD THAT:- Assessee itself offered the profit on sale of shares of Panchmahal Cement Ltd., for taxation. Before the ld. CIT(A), the assessee raised the ground that in case of Oceanic Investment Ltd. the transaction of shares of Panchmahal Cement, which was treated as bogus transaction, is upheld in appeal, the amount offered by assessee should be taken away from the income of assessee. The ld. CIT(A) rejected the ground that the assessee never claimed this profit of this amount as offered by mistake and that the assessee cannot be said to have been aggrieved by the action of Assessing Officer. In our considered view, the action of ld. CIT(A) is reasoned one. There is no adverse treatment of the profit shown on sale of shares either by Assessing Officer or by First Appellate Authority. Therefore, we do not find any justification for interfering with the finding of ld. CIT(A). Disallowance of amounts written off - Addition as assessee has not furnished evidence that any action was taken for recovery of these amount - HELD THAT:- We have noted that the Hon’ble Supreme Court in TRF Ltd. vs. CIT [2010 (2) TMI 211 - SUPREME COURT] held that after 01.04.1989 it is not necessary for the assessee to establish that debt, infact has become irrecoverable. It is enough, if the bad is written off as irrecoverable in the accounts of assessee. We have noted that the assessee has specifically pleaded that interest income from the advance was offered in earlier years, which has not been disputed by Assessing Officer. Therefore, we do not find any merit in the ground of appeal raised by revenue. In the result, the ground of appeal raised by revenue is dismissed. Disallowance of interest advanced to Oceanic Investment Ltd - revenue submits that assessee not furnished any agreement for waiver of interest on the advance to Oceanic Investment Ltd. - CIT(A) deleted the disallowances to the extent of reopening balance - HELD THAT:- On appeal before the ld. CIT(A), the assessee made detailed submission as explained before us and also explained that no disallowance was made in earlier year. The ld. CIT(A) accepted that no disallowance of interest was made in earlier year and in view of the decision of Hon’ble Karnataka High Court in CIT vs. Sridev Enterprises [1991 (1) TMI 52 - KARNATAKA HIGH COURT] . The ld. CIT(A) directed the Assessing Officer to grant the relief to the assessee to the extent of disallowance of interest related to the debit balance carried over from the preceding year. No contrary fact or law is brought to our notice to take the different view. Therefore, we do not find any reason to interfere with the finding of ld. CIT(A), which we affirmed. In the result, Ground No.2 is dismissed. Estimation of higher lease rental received - bifurcate lease rent into repayment of principal amount and interest component - HELD THAT:- We have granted full relief to the assessee on Ground No. 5 & 6 in assessee’s appeal by following the decision of Hon’ble Supreme Court in ICDS Ltd. vs. CIT [2013 (1) TMI 344 - SUPREME COURT] . Therefore, this ground of appeal raised by revenue has become infructuous
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