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TMI Blog2015 (7) TMI 1122X X X X Extracts X X X X X X X X Extracts X X X X ..... during the year nor in the future years assessee has earned any dividend income. Keeping in view the judicial pronouncements referred by the ld. AR, we restore the matter back to the file of AO for deciding afresh as per law. Disallowance of depreciation on management rights of Nagpur Hospital u/s.32(1)(ii) - Held that:- We have considered rival contentions and found from the record that exactly similar issue was restored by the Tribunal to the file of AO in assessee’s own case in the preceding year. Respectfully following the order of the Tribunal in assessee’s own case, we restore this issue to the file of AO for deciding afresh after considering the decision cited by the ld. AR in support of its contention that assessee is entitled for depreciation of management rights of Nagpur Hospital u/s.32(1)(iii) of the Act Disallowance of interest - Held that:- The advance given to Kanishka Housing Development Co. Ltd. was given as a commercial expediency, the same is, therefore, directed to be allowed. With regard to the advance given to Dr. Jay Prasanna, Dr. Bais, Wockhardt Ltd., however, nothing was placed on record to support the contention that advance was given to these perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee s claim for club expenditure and against which the department has not filed any appeal before the Hon ble High Court. We also found that the issue is squarely covered by the decision of Hon ble jurisdictional High Court in the case of Otis Elevators Co. (India) Ltd., 195 ITR 682. We have also found that Hon ble Supreme Court in the case of United Glass Mfg. Co. Ltd., C.A.No.6447/2012(SC) has decided the similar issue in favour of the assessee. The Full Bench of Hon ble Punjab and Haryana High Court in the case of Groz Beckert Asia Ltd., 351 ITR 196(P H)(Full Bench) has decided the issue in favour of the assessee. Respectfully following the order of the jurisdictional High Court as well as other High Courts discussed above, we do not find any merit in the action of the AO for disallowing assessee s claim of club expenses. 4. The next issue pertains to disallowance of interest paid on borrowings utilized for purpose of acquisition of 100% share capital of Kanishka Housing Development Co. Ltd. 5. It was contended by ld. AR that no disallowance under section 14A can be made since the assessee has not earned any dividend income. For this purpose reliance was placed on the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal to the file of AO in assessee s own case in the preceding year. Respectfully following the order of the Tribunal in assessee s own case, we restore this issue to the file of AO for deciding afresh after considering the decision cited by the ld. AR in support of its contention that assessee is entitled for depreciation of management rights of Nagpur Hospital u/s.32(1)(iii) of the Act. 11. Ground NO.5 relating to disallowance of guarantee commission was not pressed by the ld. AR, therefore, the same is dismissed as not pressed. 12. As the issue with regard to claim of depreciation on management rights has been restored back to the file of AO, the ground taken by the assessee with regard to depreciation on guarantee commission is also hereby restored back to the file of AO for deciding afresh as per law. 13. The next issue is disallowance of interest of ₹ 96,16,870/- as interest free funds advanced to Kanishka Housing Development Co. Ltd., Dr. Jay Prasanna, Dr. Bais, Wockhardt Ltd. 14. The contention of ld. AR was that assessee has advanced interest free loans to its sister concern on account of commercial expediency for which reliance was placed on the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year under consideration. Since the provision was made on the basis of actual operation and is an ascertained liability allowable as business expenditure, therefore, there is no infirmity in the order of CIT(A) for considering the provision made for leave encashment and gratuity as ascertained liabilities not includible while computing profit u/s.115JB. There is no infirmity in the order of CIT(A). Our view is supported by the following decisions : i) CIT vs. Enchjay Forgings Ltd., 251 ITR 15; ii) CIT vs. National Hydro Electric Power Corporation Ltd., 45 DTR 117; and iii) Dresser Value India Private Ltd. Vs.ACIT, 30 SOT 495. 21. The assessee in its appeal for A.Y.2006-07, is aggrieved for disallowance of employees contribution to the provident fund amounting to ₹ 55,519/- is covered by the decision of Hon ble Supreme Court in the case of Alom Extrusion and also by the decision of Hon ble Bombay High Court in the case of Hindusthan Organics Chemicals Ltd., ITXA No.399/2012 and also by the decision of Hon ble Delhi High Court in the case of Onward Technologies Ltd., ITA No.5235/Mum/2010. In view of these judicial pronouncements we do not find any merit for dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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