TMI Blog2012 (12) TMI 1044X X X X Extracts X X X X X X X X Extracts X X X X ..... O in respect of the reversal of provision for Diminution in value of Investment of ₹ 16,77,234/- on the ground that the appellant's claim was purely notional it was not proved that the investment were stock in trade and the same would be allowed only on transfer takes place. On the facts circumstance of the case it is submitted that the findings of the CIT(A) are incorrect as the appellant's plea was for exclusion of the reversal of provision made in earlier year which had been taxed in that year and again taxed in the year under consideration by the AO as appeal for those years were pending. It is submitted it be so held now. 2.1 In the facts Circumstances of the case, the Commissioner of Income Tax (Appeals) ought to have directed the AO to exclude the said reversal of the provision for Diminution in value of Investment while computing the total income as non exclusion has led to taxing the same amount in twice in two different years. It is submitted it be so held now. 3. The Commissioner of Income Tax (Appeals) erred in confirming the disallowance under section 14A of the Act in respect of interest paid on borrowings made for investments in ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that it be so held now. 5.1 The Commissioner of Income Tax (Appeals) erred in holding that the appellant had made the claim for depreciation @40% for the first time in the year under consideration. In the facts and circumstance of the case, the appellant submits that it has been granted depreciation @ 40% on these assets in all the earlier year and during the year it had only sought depreciation on the WDV on those assets. It was accordingly entitled to deprecation in the year under consideration @ 40%. It is submitted it be so held now. 6. The Commissioner of Income Tax (Appeals) erred in holding that interest charged under section 234B was consequential. In the facts and circumstances of the case it is submitted that interest u/s 234B is not chargeable. It is submitted that it be so held now. Grounds of ITA No.1557/Ahd/2009 1. The learned CIT (A) erred in law and on facts in deleting the disallowance of provisions for doubtable debts amounting to ₹ 1,29,66,421/- (1999-2000) and ₹ 6,04,18,812/- (2001-02) as the issue has not become final. 2. The learned CIT (A) erred in law and on facts in directing the Assessing Officer to allow depreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it be so held now. Grounds of ITA No.293/Ahd/2010 1. The CIT(A) has erred in law and on facts in deleting the addition of ₹ 28,22,430/- being bad debts which had been written off in earlier years. 2. The CIT(A) has erred in law and on facts in deleting the addition of ₹ 47,95,000/- on account of reversal of income (diminution in value of investment). 3. The CIT(A) has erred in law and on facts in deleting the disallowance of depreciation amounting to ₹ 28,38,136/-. The assessee company is a state owned enterprise engaged in the business of providing financial assistance to industrial units. 2. The first ground of appeal is general, which is dismissed. 3. The second ground of assessee for A.Y. 05-06 is against provision for Diminution in value of Investment of ₹ 16,77,234/-, which has not been pressed by ld. Counsel for the appellant because the CIT(A) had rectified his order dated 30.10.2009 whereas in Revenue s ground no.2 for A.Y. 06-07, the ld. A.O. made addition on account of reversal of provision for Diminution in value of Investment of ₹ 47,95,000/-. Ld. Counsel for the appellant claimed that this provision had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by factual links. Therefore, in the given circumstances without any supporting material it can not be held that the entire interest cost worked out by the A.O. is attributable to the interest free income. It would be logical to allow credit of the funds available to the appellant during relevant period for working out the interest cost on the investment in tax free securities. Since, the investment in tax free securities has been shown at ₹ 91.45 crores as against own funds to the tune of ₹ 86.98 crore, the interest on excess investment is required to be disallowed u/s.14A of the Act accordingly. The A.O. is directed to work out such interest on ₹ 91.45 crore ₹ 86.98 crore (after taking into account investment in Gross Block) accordingly. The disallowance to that extent is, therefore confirmed. For A.Y. 06-07, he relied upon the order of Special Bench ITO vs. Daga Capital Management Pvt. Ltd. 312 ITR (AT) 01 and A.O. was directed to apply Rule 8D for disallowance u/s.14A. 6. Now the assessee is before us. Ld. Counsel for the appellant contended that there was no direct nexus between borrowings and investments in tax free securities. As per asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is year. Therefore, following the principle of consistency, as propounded in CIT vs. H.P. Cotton Textile Mills Ltd. 311 ITR 436, CIT vs. Malborough Polychem Pvt. Ltd., 309 ITR 43; CIT vs. Moonlight Builders and Developers 307 ITR 197 and ACIT vs. Gendalal Hazarilal Co. 263 ITR 679 wherein it is held that even though in income-tax proceedings principle of resjudicata is not applicable, but consistency has to be maintained unless there is manifest distinguishable facts. In earlier years, claim of depreciation was accepted by the revenue which has now become final, the revenue cannot disallow the present claim, unless facts and circumstances are distinguishable. Therefore, the revenue is required to maintain a judicial consistency between itself and taxpayers. As a result, we do not find any merit in the claim of the revenue and this ground of the revenue is dismissed. In view of the above we set aside this issue to the file of Assessing Officer to decide in terms of Tribunal s decision of assessee s own case (supra) for assessment year 2001-02 after providing reasonable opportunity of being heard to the assessee. This ground of assessee s appeal is allowed for statistical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey lending business and had not fulfilled the condition laid down u/s.36(2) of the IT Act. The A.O. in A.Y. 05-06 had observed that the assessee had claimed bad debt at ₹ 13.5 crore. The A.O. had given reasonable opportunity of being heard to verify the condition prescribed u/s. 36 of the IT Act. The appellant also responded to the A.O. and relied upon the various cases. The A.O. also analyzed the fact and various case laws relied upon by him on page no.12 of the assessment order. After relying the decision of Hon ble Gujarat High Court in case of Dhall Enterprises and Engineers Pvt. Ltd. vs. CIT, 207 CTR 729 and held that the assessee had acted unilateral and written off debts as irricoverable in the books of account for the previous year relevant to the assessment year. The assessee had not made out any case to record the case as irrecoverable. The judgment of the assessee in regarding debts as bad debt is only regarded as convenient judgment to suit in claim but not an honest judgment having regard to the financial position of the assessee. Thus, he made addition of ₹ 13,50,40,960/- in the income of the assessee. He further observed that without prejudice to above, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial on record and gone through the legal position. The appellant had written off the bad debts as irrecoverable in the books of account. The legal position for the claim of bad debt is that the appellant had to write off the bad debt in the books of account as held in by the Hon ble Supreme Court in case of T.R.F. Ltd. vs. CIT (supra). The facts of the appellant are identical with the case of Srei International Finance Ltd. (supr) as NBFC. However, the assessee had recovered 28.22 lacs in subsequent year from 13.5 crore. Thus, the bad debts are allowed as claimed to the extent of ₹ 13,22,18,530/-. Accordingly, ground nos. 4 4.1 of the A.Y. 05-06 of the appellant are allowed partly and ground no. 1 of the Revenue for A.Y. 06-07 is allowed. The A.O. is directed to exclude the amount of ₹ 28,22,430/- from the income of the A.Y. 06-07. 13. Ground nos. 5 5.1 for A.Y. 05-06 of the appellant ground no. 2, 2.1 3 for A.Y. 06-07 of the revenue are against confirming the higher rate of depreciation @ 40% on vehicle given on lease and claim has been made in first time. The A.O. observed that company is a state owned enterprise engaged in the business of providing fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t should be decided in favour of the assessee as held by the Hon ble Supreme Court in case of Vegetable Products Ltd. (1973) 88 ITR 192 (SC), in favour of the assessee. From the side of Revenue, ld. CIT DR vehemently relied upon the orders of the lower authorities. 16. We have heard the rival contentions and perused the material on record. The assessee had not sold and leased back the new assets during the year, the depreciation claimed by the appellant on written down value of sale and lease back assets. The identical issue in assessee s own case in ITA No. 2763/Ahd/2007, wherein Revenue s appeal had been dismissed by the Co-ordinate C Bench, Ahmadabad for A.Y. 04-05. The similar issue was considered by C Bench, Ahmadabad in assessee s own case in ITA No. 865/Ahd/2006 ITA No.1927/Ahd/2007 for A.Y. 02-03 and held that sale and lease back is a continuing transaction addition admitted by both the sides. Respectfully, following the Tribunal s decision, we dismiss this issue of Revenue s appeal. The revenue had not distinguished the findings of Coordinate Bench given for earlier year when transactions are same and depreciation claimed on written down the value of the same a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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