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TMI Blog2014 (7) TMI 1173X X X X Extracts X X X X X X X X Extracts X X X X ..... f interest u/s. 234B and 234C - Held that:- Levy of interest u/s. 234B of the Act would be consequential to our findings given for ground No. 1 and in so far as levy of interest u/s. 234C is concerned, we direct the AO to charge interest as per the provisions of law on the returned income of the assessee. Disallowance of deduction u/s. 35D - Held that:- This issue has been decided against the assessee in A.Y. 1992-93 to 1994-95 No disallowance can be made u/s. 80M Disallowance of expenses for earning dividend income to be allowed - I.T.A. No.1881/Mum/2000, I.T.A. No.3708/Mum/2000, I.T.A. No.3535/Mum/2004, I.T.A. No.3827/Mum/2005 - - - Dated:- 25-7-2014 - <!--[if gte mso 9]> <![endif]--> SHRI N.K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, out of the lease rental offered as income, the AO found that capital component works out to ₹ 4,47,674/-, the same was reduced from the income having held to be the transactions of lease as finance transactions. 4. Aggrieved by this, the assessee carried the matter before the Ld. CIT(A) but without any success. 5. The assessee is before us against this findings of the Ld. CIT(A). 6. Before us, the Ld. Counsel for the assessee submitted that identical issues were there in assessment years 1996-97 and 1997-98 and the Tribunal in ITA Nos. 3643 3644/M/2001 has considered similar grievance and while deciding the issue in favour of the assessee, the Tribunal has followed the decision of the Hon ble Supreme Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Cosmos Films (supra) wherein the Hon ble Delhi High Court has considered the implications of Sec. 19 of Sale of Goods Act, 1930. 10. The Tribunal, Mumbai Bench in the case of Development Credit Bank Ltd. (supra) has followed the decision of the Hon ble Supreme Court in the case of ICDS (supra) and the decision of Hon ble Delhi High Court in the case of Cosmos Films (supra) and allowed the claim of depreciation. 11. The Tribunal, Mumbai Bench, in the case of L T (supra) has considered a similar issue at para 27 of its order and at para 28 followed the findings of the Hon ble Supreme Court in the case of ICDS (supra) and also of the co-ordinate Bench in the case of Development Credit Bank Ltd. (supra) and allowed the claim o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the disallowance of preliminary expenses of ₹ 25,75,848/-. Ground No. 2 relates to disallowance of expenses incurred for earning dividend of ₹ 4,88,27,156 and Ground No. 3 relates to the disallowance of depreciation on leased assets of ₹ 30,77,89,670/-. 18. While scrutinizing the return of income, the AO noticed that the assessee has claimed deduction u/s. 35D amounting to ₹ 25,75,848/-. The AO noticed that all these expenditures have been incurred after the commencement of the business. The AO was of the opinion that as per Sec. 35D of the Act, such expenditures are admissible only if incurred in connection with expansion of industrial undertakings or setting up of new industrial undertakings. The AO following th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Tribunal for A.Y. 1995-96. 26. We have carefully perused the orders of the authorities below. We have also gone through the decision of the Tribunal for A.Y. 1995-96 reported in 115 ITD 25 wherein we find that the Tribunal has relied upon the decision of the Hon ble Bombay High Court in the case of CIT Vs Emrald Co. Ltd. 284 ITR 586 and at para 22 of its order, the Tribunal following the decision of the Hon ble Bombay High Court held that no disallowance can be made u/s. 80M of the Act. As no distinguishing facts have been brought before us, respectfully following the findings of the Tribunal (supra), we hold accordingly. 27. Ground No. 3 relates to disallowance of depreciation on Lloyd Steels. An identical issue h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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