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of <h1>Tribunal dismisses appeals, upholds Rule 8D disallowance, deletes bad debts, treats royalty as expense.</h1> <h3>Shriram Chits Tamilnadu Pvt. Ltd. Versus The Assistant Commissioner of Income Tax, Company Circle VI (2), Chennai. AND Vice-Versa.</h3> The Tribunal dismissed both the assessee's and Revenue's appeals. The foreman's dividend was treated as income, disallowance under Rule 8D r.w.s. 14A was ... - Issues Involved:The judgment involves issues related to the treatment of foreman's dividend as income of the assessee, disallowance of expenses under Rule 8D r.w.s. 14A of the Act, deletion of disallowed bad debts, and treatment of royalty payment as revenue expenditure.Treatment of Foreman's Dividend:The assessee, engaged in chit fund business, filed its return showing total income at NIL. The Assessing Officer brought foreman's dividend of Rs. 3,32,50,750/- to tax, considering it as income of the assessee. The CIT(A) confirmed this addition, citing a previous Tribunal decision against the assessee for a similar issue. The Tribunal, following precedent, dismissed the appeal on this issue.Disallowance under Rule 8D r.w.s. 14A:The Assessing Officer disallowed Rs. 5,13,800/- under Rule 8D r.w.s. 14A for expenses related to earning dividend income. The CIT(A) upheld this disallowance, stating lack of justification by the assessee for a lower amount. The Tribunal found no reason to interfere with the CIT(A)'s order and confirmed the disallowance.Deletion of Disallowed Bad Debts:The Assessing Officer disallowed bad debts of Rs. 21,45,81,730/- claimed by the assessee. The CIT(A) allowed the appeal, citing a previous Tribunal decision in favor of the assessee for a similar issue. The Tribunal, following precedent, dismissed the appeal of the Department on this issue.Treatment of Royalty Payment:The Assessing Officer treated royalty payment of Rs. 85,81,955/- as capital expenditure, while the assessee claimed it as revenue expenditure under section 37 of the Act. The CIT(A) allowed the appeal, following a previous Tribunal order in favor of the assessee. The Tribunal, in line with precedent, confirmed the order of the CIT(A) regarding the treatment of royalty payment as revenue expenditure.In conclusion, both the appeal of the assessee and the appeal of the Revenue were dismissed by the Tribunal based on the above decisions and findings.
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