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TMI Blog2018 (5) TMI 1001X X X X Extracts X X X X X X X X Extracts X X X X ..... et submitted that he was not pressing grounds 2, 3 and 10. Accordingly, grounds 2, 3 and 10 are dismissed as not pressed. 3. Vide its ground No.4, grievance raised by the assessee is on a disallowance of interest cost of D70,75,350/-. 4. Assessee engaged in a business of non banking financial services was required by ld. Assessing Officer during the course assessment proceedings to furnish details of statutory liabilities and the proof of payment. Assessee had booked an interest of D70,35,356/- as payable on loans, taken on the security of three keyman insurance policies. Such interest was added to the outstanding loan amount due to LIC. However, assessee it seems could not produce any evidence for remitting such interest. Ld. Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him''. There is no dispute that interest to the extent of D70,35,356/- on loans borrowed from LIC, a public financial institution, stood payable as at the end of relevant previous year. Section 43B of the Act, mandates that interest payments could be allowed only in the year in which it is actually paid. Assessee having not paid interest during the relevant previous year, lower authorities were justified in applying Section 43B of the Act and making a disallowance. Accordingly, ground number 4 is dismissed. 8. Vide its ground 5 to 9, assessee is aggrieved o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce was also placed on the decision of a Co-ordinate Bench of the Tribunal in the case of DCIT vs. Indowind Energy Ltd, (ITA No.1854/2015, dated 25.10.2016). 10. Per contra, ld. Departmental Representative submitted that assessee was unable to show why higher rate of depreciation was charged on windmills. According to him, lower authorities were justified in restricting the claim of depreciation to 5.28%, while computing the profits for applying Section 115JB of the Act. 11. We have considered the rival contentions and perused the orders of the authorities below. Section 205 of the Companies Act, 1956 prescribes method of charging depreciation. Relevant extract of the said Section is reproduced hereunder:- (1) ...................... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ost of that asset to the company will have been provided for by way of depreciation if depreciation were to be calculated in accordance with the provisions of section 350. Section 350 of the Companies Act, 1956, referred in clause 2(a) above is reproduced hereunder:- 350. Ascertainment of depreciation. The amount of depreciation to be deducted in pursuance of clause (k) of sub-section (4) of section 349 shall be the amount of depreciation on assets as shown by the books of the company at the end of the financial year expiring at the commencement of this Act or immediately thereafter and at the end of each subsequent financial year, at the rate specified in Schedule XIV: Provided that if any asset is sold, discarded, demolished or des ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act, 1961 on wind mills investments for FY 11-12. Accordingly the current year's depreciation includes Rs. 75,562,500/- charged on such wind mills." No doubt, assessee is free to provide depreciation at a rate higher than what is mentioned in Schedule XIV of the Companies Act, 1956. However, in opting for this method assessee has to show that the depreciation is calculated in accordance with clause (b) of Section 205(2) of the Companies Act, 1956. Except for the note mentioned above, nothing was brought on record to show how and on what basis the specified period and the higher rate of depreciation was arrived by the assessee. In such circumstances, lower authorities in our opinion were justified in falling to Schedule XIV of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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