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Issues involved: The judgment involves issues related to denial of natural justice, addition of accrued interest on Non Performing Assets (NPA), treatment of amount received towards repayment of principal, disallowance of penal expenses, disallowance of expenses u/s 14A of the Act, addition of reversal of provision for NPA, treatment of income from business as income from other sources, computation of book profit u/s 115JB of the Act, and levy of interest u/s 234B and 234D of the Act.
Denial of Natural Justice: The appellant contested denial of natural justice as one of the grounds of appeal. However, the learned counsel for the appellant decided not to press this ground during the proceedings. Addition of Accrued Interest on NPA: The appellant challenged the addition of accrued interest on Non Performing Assets (NPA) amounting to Rs. 7,424,722. The Tribunal allowed this ground based on a previous decision in the appellant's own case for AY 2003-04. Treatment of Amount Received Towards Repayment of Principal: The appellant disputed the treatment of the amount received towards repayment of principal as interest due, totaling Rs. 10,497,000. This ground was allowed by the Tribunal based on the findings in the appellant's case for AY 2003-04. Disallowance of Penal Expenses: The appellant raised concerns regarding the disallowance of expenses penal in nature amounting to Rs. 3,000 related to M/s KEC Holdings Limited. The appellant did not press this ground, and it was accordingly dismissed. Disallowance of Expenses u/s 14A of the Act: The appellant contested the disallowance of expenses u/s 14A of the Act totaling Rs. 900,000. The Tribunal partially allowed this ground by restricting the disallowance to 5% of the dividend income. Addition of Reversal of Provision for NPA: The appellant objected to the addition of reversal of provision for NPA amounting to Rs. 38,250,000. The Tribunal directed the Assessing Officer to verify the year in which the provisions were made and whether they were added back to the profit in the year of their creation. Treatment of Income from Business as Income from Other Sources: The appellant challenged the treatment of income from business as income from other sources amounting to Rs. 295,234. The Tribunal confirmed the CIT[A]'s decision, dismissing the appellant's appeal on this ground. Computation of Book Profit u/s 115JB of the Act: The appellant raised concerns regarding the computation of book profit u/s 115JB of the Act. Since the additions made by the AO were deleted, the Tribunal reversed the CIT[A]'s order on this count, allowing the appeal on this ground. Levy of Interest u/s 234B and 234D of the Act: The appellant contested the levy of interest u/s 234B and 234D of the Act. The Tribunal directed the AO to levy interest, if any, after giving effect to their order. This ground was allowed for statistical purposes.
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