2019 (4) TMI 1871

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....o earning dividend income which is in contravention to rule 8D(2)(iii) of the Income-tax Rules, 1962 ? (b) Whether on the facts and in the circumstances of the case and in law, the Tribunal has erred in holding that the amount deducted by the Assessing Officer is admissible under section 37(1) of the Income-tax Act, 1961 as wholly and exclusively for the purpose of business ? (c) Whether on the facts and in the circumstances of the case and in law, the Tribunal has erred in holding that the assessee has rightly written off the debts and it was clearly admissible as a deduction under section 36(1)(vi) of the Income-tax Act, 1961 ? (d) Whether on the facts and in the circumstances of the case and in law, the Tribuna....

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....f rule 8D as it stood at the relevant time provided for a formula for such disallowances. Clause (iii) of rule 8D(2) of the Rules pertains to disallowance of what is popularly referred to as administrative expenses. Though no such expression is used in the Rule which would be an amount equal to one-half percent. of the average of the value of the investment. It would prima facie appear that once this rule applied and therefore, the said formula become applicable, the Tribunal thereafter could not have taken other factors into account to come to the conclusion that such disallowance was excessive. 5. However, in the present case, we are not inclined to admit the appeal on this ground. Firstly because the disputed amount itself is not very....

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....) of the Act. In this respect, the Tribunal noted that the assessee had purchased certain assets on slump sale basis. In the process, certain debts which were part of the current assets were reduced. The assessee wrote off a sum of Rs. 1.76 crores claiming the same to be admissible under section 36(1) of the Act. The Tribunal while reversing the view of the Assessing Officer and the Commissioner of Income-tax (Appeals) in which it was held that in the process, the assessee was claiming double benefit, observed as under : ". . . We find that both the Assessing Officer and the Commissioner of Income-tax (Appeals) had completely ignored the fact that under 'adjustment to purchase price' the purchaser reassigned some debits amo....