Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (9) TMI 1850 - ITAT AHMEDABADAddition on account of bad debts - HELD THAT:- Assessee is eligible for claiming bad debts as it was provided to M/s. Roopa Plastics Technology Pvt Ltd in the course of money lending business. Thus, we do not find any reason to disturb the findings of the CIT(A). Hence, these grounds of appeal of the Revenue are dismissed. Addition u/s 14A read with Rule 8D - HELD THAT:- There remains no ambiguity that own-funds of the assessee is exceeded the investment as discussed above. In such circumstances, the Hon’ble Gujarat High Court in the case of UTI Bank Ltd. . [2013 (8) TMI 238 - GUJARAT HIGH COURT] has observed that where sufficient interest-free funds are available to meet the amount of investment then no disallowance on account of interest expenses is warranted under section 14A r.w.r. 8D of Income Tax Rules. Disallowance under Rule 8D(2)(iii) - Assessee failed to bring anything contrary to the findings of the Hon’ble ITAT as discussed above. Therefore, we sustain the disallowance made by the AO under Rule 8D(2)(iii) for ₹ 6,36,463/- only. This ground of appeal of the Revenue is allowed. MAT computation - Disallowances made under the provisions of Sec. 14A r.w.r. 8D cannot be applied to the provision of Sec. 115JB as per the direction of the Hon'ble Calcutta High Court in the case of CIT Vs. Jayshree Tea Industries Ltd. [2014 (11) TMI 1169 - CALCUTTA HIGH COURT] Disallowance as per the clause (f) to Explanation-1 of Sec. 115JB independently on account of dividend income. However, we also note that there is no mechanism given under the clause (f) to Explanation-1 of Sec. 115JB to workout/ determine the disallowance. Therefore in the given facts & circumstances, we feel that ad-hoc disallowance will service the justice to the Revenue and assessee. Therefore to put the dispute to rest in given facts & circumstances, we direct for the ad-hoc disallowance to avoid the multiplicity of the proceedings and unnecessary litigation. Thus we direct the AO to make the disallowance of ₹ 5 Lacs under clause (f) to Explanation-1 of Sec. 115JB of the Act. This fact on record that we have restored other cases involving identical issues to the file of AO for making the disallowance as per the clause (f) to Explanation-1 of Sec. 115JB independently. But now we are of the view that as there is no mechanism provided under the clause (f) to Explanation-1 of Sec. 115JB of the Act to make the disallowance independently, therefore there would be unnecessarily further litigation, if the matter is sent back to the file of AO. Thus, we propose to limit the disallowance on an ad-hoc basis for ₹ 5 Lacs as per the clause (f) to Explanation-1 of Sec. 115JB. Thus the ground of appeal of the Revenue is partly allowed.
|