9911796707
TMI Blog2000 (2) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... e is entitled to investment allowance and also additional depreciation on machineries leased out by it to others on hire? Whether on the facts and in the circumstances of the case, the ITAT is right in holding that no interest accured on loans in Court and in that view in distinguishing the present case from the case of State Bank of Travancore (158 ITR 102) aas decided by the Supreme Court and finally in deleting the addition, of the interest amount of ₹ 87,720/- Facts of the case are that the assessee is engaged in the business of leasing out and hiring. The assessing officer disallowed the claim of the assessee in this regard on the ground that the assessee itself is not engaged in any manufacturing or production operations and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 113 of 12 STC ): "It is well settled that a mere contract of hiring, without more, is a species of the contract of bailment, which does not create a title in the bailee, but the law of hire purchase has undergone considerable development during the 1st half a century or more and has introduced a number of variations, thus leading to categories, and it becomes a question of some nicety as to which category a particular contract between the parties comes under." We need not dwell on the niceties of a hire purchase contract since we are concerned only with contracts of hire simpliciter." In view of the above we are of the opinion that the ITAT was right in holding that the Investment Allowance under Section 32A is allowable on the assets le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing authority to decide whether the interest income which is transferred to the suspense account is, in fact arising in respect of a doubtful or 'sticky' loan. This is done by providing that non-receipt of interest for the first three years the payment of interest is not received, from the four year onwards it will be treated as on doubtful loan and will be added to the income only when it is actually received."
In View of the above observations, we are of the view that the Tribunal was right in law in holding that no interest accured on loans and finally in deleting the addition of the interest amount of ₹ 87,720/-.
Reference is accordingly answered in favour of the assessee and against the department. X X X X Extracts X X X X X X X X Extracts X X X X
|
