TaxTMI 
TaxTMI 
TaxTMI 
2014 (11) TMI 677
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....(vii) of the Act. 3. That the CIT(Appeals), in affirming the disallowance of Rs. 2,29,89,602/- has erred in law and on facts in not appreciating that the assessee has not claimed any deduction u/s 36(1)(viia) of the Income Tax Act 1961 either in the previous year under appeal or in any preceding previous year thereby wrongly invoking proviso to section 36(1)(vii) of the Income Tax Act 1961. 4. That the CIT (Appeals), in affirming the disallowance of Rs. 2,29,89,602/- has erred in law and on facts in justifying his action on the ground that the assessee had a credit balance of Rs. 11,45,28,355/- in the 'provision for Bad & doubtful Debts' account and same was available as on 31/03/2006. 5. That the CIT (Appeals), in affirming the disallowance of Rs. 2,29,89,602/- has erred in law and on facts in not appreciating that provisions for Non performing Assets/ Bad debts in book of assessee are made as per 'Income Recognition & Asset classification' norms of RBI but not considered for computing the income of the assessee under the Income Tax Act 1961. 6. The CIT (Appeals), in affirming the disallowance of Rs. 2,29,89,602/- has erred in law and on facts in justifying the....
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.... favour of the assessee by the judgment of Hon'ble Apex Court in the case of T. R. F. LTD. Vs Commissioner of Income-tax [2010] 323 ITR 397 (SC). 6. The stand of the CIT(A) is different. He is deciding the issue as per section 36(1)(viia) of the Act i.e. regarding the provision for bad debt and disallowed the claim of the assessee on the basis that in the details furnished by the assessee, it is not clear if these were rural or urban bad loans and further as reserve had been created, the write off has to be limited to the amount of reserve created. He is alleging that the assessee is taking double deduction u/s 36(1)(vii) and 36(1)(viia) of the Act. We have already seen that the assessee is claiming only one deduction u/s 36(1)(vii) that too in respect of actual write off of bad debt and not for any provision for bad debt. Considering all these facts, we are of the considered opinion that the issue is covered in favour of the assessee by the judgment of Hon'ble Apex Court in the case of T. R. F. LTD. Vs Commissioner of Income-tax (supra). But even then it has to be seen that the assessee is satisfying the requirement of section 36(2) of Income Tax Act. For this purpose, we....
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....llowing Rs. 1,30,000/- on account of membership fees. 9. That the authorities below have erred in law and on facts in not appreciating that expenses incurred by the assessee on account of membership fees is allowable u/s37(1) of the Income Tax Act, 1961. 10. That the authorities below have erred in law and on facts in disallowing Rs. 4,97,872/- out of Medical allowance. 11. BECAUSE the order appealed against is contrary to the facts, law and principles of natural justice." 9. It was submitted by Learned A.R. of the assessee that ground Nos. 1 to 7 are in respect of assessee's claim for bad debt written off of Rs. 1,62,40,448/0. Both the sides agreed that the facts are identical in this year and hence, the issue can be decided on similar line. 10. We have considered the rival submissions. From the assessment order, we find that it is noted by the Assessing Officer that it was categorically submitted by the assessee before him that the assessee has neither made any provision nor claimed any deduction u/s 36(1)(viia) of the Act in respect of provision made for bad and doubtful debts. It was also submitted by the assessee before the Assessing Officer that the assessee has been cla....
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....bership fees of Rs. 3.50 lac debited to these heads was disallowed. The CIT(A) confirmed the disallowance on the basis that in the absence of any evidence it has not been established by the assessee that a benefit was obtained in the field of revenue and such an expenditure was attributable as revenue expenditure. He has given a finding that the expenditure paid by way of subscription to the club cannot be said to be incurred for the purpose of business of the assessee as no evidence of any real advantage accrued to the business of the assessee company was brought on record. He has noted various judgments of various High Courts such as Hon'ble Bombay High Court in the case of Otis Elevators Co. (India) Ltd. 195 ITR 682 and noted that as per this judgment, the reimbursement of expenditure spent in the club and not the fee paid for obtaining the membership fees. He has also referred to a judgment of Hon'ble Kerala High Court rendered in the case of Framatone Connector Oen Ltd. vs. DCIT 294 ITR 559 wherein it was held that similar payment paid to Cochin Yatch Club towards institutional membership fee, the expenditure effected by the assessee was capital in nature. This is also....