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TMI Blog2014 (12) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... siness of leasing, investment banking, securities management etc. In all these three years, the assessing officer completed the assessment by making various types of additions. The appeals filed by the assessee were partly allowed by the Ld CIT(A) and hence both the parties have filed these appeals before us on the points decided against each of them. Some of the issues are identical in nature in all the three years and hence we prefer to adjudicate the common issues first. 3. We shall first take up the appeals filed by the assessee. The first common issue relates to the Disallowance of Lease Equalization Reserve. The assessing officer disallowed the claim of lease equalization reserve on the reasoning that it is not a prescribed expenditu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of dividend income and interest income u/s 10(33)/10(23G) of the Act. The AO took the view that only the Net interest income is eligible for exemption in view of the provisions of sec. 14A of the Act. Accordingly, the AO allowed deduction of net income only in all the three years and the same was also confirmed by Ld CIT(A). The Ld A.R submitted that the provisions of sec. 14A is applicable prospectively from AY 2008-09 onwards only. Further, the Ld A.R submitted that the assessee is having both own funds and loan funds and the investments made in eligible companies are funded out of own funds only. In this regard, the Ld A.R placed reliance on the decision rendered by Hon'ble Mumbai High Court in the case of M/s Reliance Utilities & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of decision rendered by Hon'ble Delhi High Court in the case of Goetz India Ltd (supra). 6. The next common issue contested in assessment years 1999-2000 and 2001-02 relates to the disallowance of claim of 'Provision for Bad debts'. The assessee claimed the deduction of the amount debited to the Profit and Loss account as "Provision for bad debts" on the ground that the same has been created in accordance with the directions issued by the Reserve Bank of India. However, the said claim has been rejected by both the tax authorities. We notice that the identical disallowance made in the assessee's hand in AY 1994-95 has been restored to the file of the assessing officer with the direction to decide this issue afresh in the light of the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue urged in AY 1990-91 and 1994-95 have been restored to the file of the AO. However, the assessee did not bring to our notice about the result of the fresh examination conducted by the AO. Hence, we have no other option, but to remand this issue to the file of the assessing officer with the direction to examine this issue. 9. In assessment year 1999-2000, the assessee is challenging the interest charged u/s 234B and 234C of the Act. Since the charging of interest is consequential in nature, the same does not require any adjudication. However, since we have set aside certain issues to the file of the assessing officer, the AO may consider the contentions, if any, put forth by the assessee in this regard. 10. We shall now take up the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the interest paid, in respect of capital borrowed for acquisition of an asset for extension of existing business or profession (whether capitalized in the books of account or not); for any period beginning from the date on which the capital was borrowed for acquisition of the asset till the date on which such asset was first put to use, shall not be allowed as deduction." Hence, consistent with the view taken by the co-ordinate bench of Tribunal in the earlier years, we hold that the assessee is entitled to claim interest expenditure u/s 36(1)(iii) in respect of capital borrowed for acquiring capital assets in these years and accordingly uphold the order of Ld CIT(A) on this issue. 12. Next common issue urged by the revenue in all the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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