assessee with regard to depreciation and investment allowance and broken period interest. The basis for reopening was the decision of the Supreme Court ... period upto the date of sale. Similarly, during the said periods, the assessee purchased Government securities-cum-interest and paid interest for the broken period
Additions
1. Depreciation on securities 59,27,74,569
2. Broken period interest 9,98,67,263
3.Brokeragepaid 28,000
4. Expenditure for earning ... addition of Rs. 9,98,67,263/- on account of broken period
interest paid on the securities holding that when the securities forming
part
vide impugned order granted relief on the issue of Broken period
interest of Rs.14,51,83,335/- and also granted relief on account ... granting relief
on account of addition made on broken period interest. The facts set out
by the Assessing Officer on the above addition
debited an amount of Rs.1811,68,18,261/- as broken
period interest in its profit and loss account. On a perusal of the details ... observed by the A.O that the aforesaid broken period interest comprised of viz.
(i) Rs.21,31,56,830/- for AES category
made on account of excess of
broken period interest over the broken period interest received.
3. Deleting the addition ... deduction, for the
broken period interest paid. With this it has been found, that since the
interest received for the broken period has been taxed
depreciation on
investment'
B) Disallowance of
broken period interest
Rs.19,11,491/-
3. ITA No.349/Asr/2012 2006-07 Revenue Against penalty ... submitted that broken
period interest was debited in the P&L Accounts and the entire interest
was credited to 'interest earned head
this regard has also been
found correct.
(ii) As regards broken period interest, the case laws cited by the
assessee [Citibank N.A. (Civil Appeal ... case. In the present
case, it is not the case that broken period interest realized on sale have
11
ITA No.3724/Mum/2013
consideration it had taken into account in the books of account broken period interest on these securities calculated up to 31st March. In the assessment ... broken period interest to its P&L a/c. However, while filing returns of income the interest income for the broken period is excluded
erred in disallowing Rs.1,16,71,677/- on account of broken period interest
by reopening the assessment u/s 148 of Income ... debited to the Profit & Loss Account under the head
'broken period interest paid' was wrongly allowed as a deduction in the
original
claimed interest
expended for purchasing/ sale of securities and such
broken period interest claimed by the assessee is not an
allowable expenditure as per provisions ... interest upto the date of purchase. As interest earned
from the securities are assessed as business income, interest for
the broken period included
