2015 (3) TMI 1184

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ional submissions filed under Rule 46A of the Income- Tax Rules, 1962 and further erred in holding that appellant has not placed any material before Additional Commissioner of Income- Tax [hereinafter referred to as the ACIT] in support of its claim for bad debts. (c) The CIT (A) erred in ignoring the jurisdictional Hon'ble Income-Tax Appellate Tribunal's Order in appellant's own case for Assessment Year 2005-06 filed along with the submission dated May 17.20 I 0 and confirming the disallowance of bad debts written off during the relevant Assessment Year. 2. (a) The CIT (A) erred in confirming the disallowance under Section 14A of the Act by holding that the provisions of section 14A of the Act are attracted in the appellants case. The CIT (A) ought to have confirmed that provisions of Section 14A of the Act are not applicable as the appellant has not incurred any expenditure in relation to the earning of tax free income. (b) Without prejudice to the above, the CIT (A) erred in not adjudicating and confirming the appellant's contention that the provisions of sub-section (2) and (3) of Section 14A read with Rule 80 of Income-Tax Rules, 1962 do not apply t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ny of the foregoing grounds of appeal, if and when necessary. ITA No. 2210/Mum/2012,AY.-2007-08(Appeal by the AO) 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the foreseeable losses of Rs. 34,83,000/- ignoring the fact that it is mere provision and not the actual expenditure for which the assessee has neither made any claim in the return of income nor filed revised return of income. 2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing deduction of retention money amounting to Rs. 77,21,000/- ignoring the fact that the assessee company has neither claimed it in the return of income nor filed revised return of income. 3. The Ld. CIT(A)'s order is perverse in law and on facts and deserves to be set aside. 4. The appellant prays that the order of CIT(A) on the above grounds be set aside and that of the AO restored. The appellant craves leave to amend or alter any ground or add a new ground that may be necessary. ITA No. 265/Mum/2011,AY.2005-06: Assessee-company,engaged in the business of providing engineering consultancy services,filed its return of income on 30.11.....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e Act, that the assessee had failed to produce any documentary evidence to show that the debts had become bad. Referring to the judgment of Oman International Bank and (313 ITR 128)of Bombay High Court,the FAA held that disallowance of bad debts of Rs. 69.22 Lakhs made by the AO was to be confirmed. 4. Before us, Authorised Representative(AR) stated that in the schedule 12 of the Profit & Loss Account it had shown the amount of bad debts written off, that party wise details of bad debts and explanation was submitted before the FAA, that before him evidences with respect to recovery of bad debts were also filed, that details of bad debts and evidences demonstrating efforts made for recovery of bad debts were submitted before the AO on 17.10.2008. He referred to page 11,27 to 45,114 to 132 of the Paper Book. AR relied upon the cases of TRF Vs. CIT (323 ITR 397), Oman International bank(313 ITR 128),M.P. Warehousing & Logistic Corporation Ltd. (21 taxmann.com 322),C.M.S. Securities Ltd.(ITA No. 7531/Mum/2011).Departmental Representative (DR) supported the order of the FAA. 5. We have heard the rival submissions and perused the material before us. We find that the AO and the FAA ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s no dividend distribution under the growth options, that out of the total investment of Rs. 2307.18 Lakhs investment in the mutual funds growth scheme was from Rs. 1650 Crores, that the capital was reflected in the net annual value. After considering the submissions of the assessee and the assessment order,the FAA held that the assessee could not prove the nexus that investments were made out of free funds only,that it was maintaining any overdrafts bank account out of which the investment had been made,that no separate bank account for the purpose of investment had been maintained.He referred to the judgment of Abhishek Industries Ltd. (286 ITR 1) of the Hon'ble Punjab & Haryana High Court and held that the assessee had failed to discharge the onus cast upon it.He also referred to cases Southern Petro Chemical Industries (93 TTJ 161), S.G. Investments and Industries Ltd. (89 ITD 44), Daga Capital Management (P) Ltd. (119 TTJ Mumbai).Finally,he directed the AO to rework the disallowance u/s. 14A of the Act. 8.Before us,AR contended that sufficient own funds were available to the assessee for making investments, that submission was made before the FAA showing the availabi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....on that considering the facts of the case,in the interest of justice, matter should be sent back to the file of the AO to determine the interest disallowance within the parameters of the alternative argument. As far as administrative disallowance is concerned,we are of the opinion that disallowance @ 1% will be sufficient to meet the end of justice.Ground of no.2 is decided in favour of the assessee,in part. ITA No. 2460/Mum/2012,AY.2007-08: 10.First ground of appeal is deals with disallowance of bad debts amounting to Rs. 34,30,813/-. Following our order for the earlier year,we decide ground no.1 in favour of the assessee,as the facts for the AY.s.are identical. 11.Next ground of appeal is disallowance made u/s. 14A of the Act, amounting to Rs. 2.26 Lakhs. We have decided the identical issue in favour of the assessee in part,while adjudicating the appeal for the earlier AY.Following the same we restore back the issue to the file of the AO to determine the interest disallowance within the parameters of the alternative argument, as mentioned at paragraph no.9 of the order.As far as disallowance of administrative expenditure is concerned,we are restricting it to 1%,follow....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....uring the year and also claimed the amount of Rs. 32,70,000/- being provision written back against the earlier provisions made which was added back to the income in earlier AY. The assessee,in the computation of income,had added back Rs. 34.83 Lakhs being difference between provisions made and loss written back (67.53 lakhs -32.70 lakhs Rs. 38.83)as per the past practice. The AO held that the amount in question was not allowable because the assessee had not claimed the same at the time of filing of return of income, that it had not filed any revised return claiming the disputed amount. 13.1.During the appellate proceedings, the FAA referred to the judgment of Hon'ble jurisdictional High Court delivered in the case of Balmukund Acharya(ITA No.217 of 2001)and held that principally amount of foreseeable losses had to be allowed by the AO,that the disallowance of losses, amounting to Rs. 34.83 Lakhs, was not sustainable. 13.2.Before us, the AR stated that the FAA should have allowed the correct amount of loss and not the part of it.DR left the issue to the discretion of the bench. We have heard the rival submissions and perused the material before us.We find that the only dis....