TMI Blog2014 (12) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... t is required to be added while computing the book profit u/s 115JA of the Act - since the matter relating to the disallowance to be made u/s 14A is remitted to the AO, this issue is also remitted back for adjudication. Claim of provision for bad debts disallowed – Held that:- A specific query was put to assessee as to whether it would be acceptable to the assessee if the disallowance of Provision for bad debts is confirmed in these two years and a direction is given to the AO to exclude the amount so offered (reversal of provision) in subsequent years from the total income, the assessee, after consulting the company’s representative, agreed to the same - the disallowance of amount claimed as ‘Provision for bad debts’ in both the years stand confirmed – the AO is directed to exclude the amount offered by the assessee by reversal of Provision for bad debts in the years in which it was so offered. Expenses on clubs – Held that:- The club membership fees paid for employees is allowable u/s 37 - the issue requires fresh examination in the light of decision rendered by Hon’ble Supreme Court – thus, the order of the CIT(A) is set aside and remitted back to the AO for fresh consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r back to the file of the assessing officer with certain directions. In this regard, he invited our attention to the order dated 11.7.2014 passed in the assessee s hand in ITA No.1583/Mum/2011 relating to assessment year 1998-99. We notice that the Tribunal, in the above said assessment year, has followed the decision rendered by the co-ordinate bench in the assessee s own case relating to assessment years 1994-95 to 1997-98 in ITA No.2308, 2307, 2309 2310/Mum/2011. We have gone through the order passed by the Tribunal for AY 1998-99, wherein the Tribunal has extracted the observations made by the co-ordinate bench in the order passed for AY 1994-95 to 1997-98, wherein the Tribunal has explained the concept of Lease equalization charge and accordingly restored the matter back to the file of the assessing officer for carrying out fresh examination. Consistent with the view taken by the Tribunal in the earlier years, we set aside the orders of Ld CIT(A) in all the three years under consideration and restore the same to the file of the assessing officer with the direction to decide the issue afresh in the light of discussions made by the Tribunal in AY 1994-95 to 1997-98. 4. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 decision of the Special bench of the Tribunal in the case of New India Industries ltd, New Delhi ITA No.3958/Del/2003. 7. The Ld A.R submitted that the assessee has reversed the provision no longer required in its books of account and has offered the same as its income in the subsequent years. Accordingly he submitted that the provision for bad debts created during the year should be allowed. However, both the parties failed to furnish the details of decision rendered by the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Supreme Court in the case cited above, since the details of club expenditure are not available on record. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of the AO for fresh consideration. 11. The next issue relates to the disallowance of interest claimed u/s 36(1)(iii) of the Act on the reasoning that part of interest has to be capitalized. The AO disallowed part of interest claim by holding that they relate to the amounts borrowed for acquisition of Capital assets. However, this issue has been decided in favour of the assessee by the Tribunal in the assessee s own case in earlier years viz., ITA No.2773/Mum/98 and 2283/Mum/98 relating to AY 1994-95 and 1993-94. We also notice that the following proviso was inserted in sec. 36(1)(iii) only with effect from 1.4.2004 by Finance Act 2003:- Provided that any amount 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 ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
