2013 (4) TMI 925 - AT - Income Tax

Summary

Issues involved: Disallowance of provision for trade guarantees, disallowance on account of hypothesis, disallowance of expenditure on payments to clubs, disallowance of bad debts and liquidated damages, disallowance of deduction claimed u/s 80HHC.

Dispute 1 - Disallowance of provision for trade guarantees:
- The appellant contested the disallowance of provision for trade guarantees of Rs. 2,55,65,091 made by the AO and confirmed by the Ld.CIT(A).
- The AO allowed deduction of actual expenditure incurred and credit for guarantees written back, reducing the amount from the total income returned by the assessee.
- The Ld.CIT(A) confirmed the action of the AO, stating no disallowance was made on account of provision created for trade guarantees.
- The appellant argued that the issue was decided in their favor by the Tribunal in previous years, and since no difference in facts was presented, the issue was decided in favor of the assessee.

Dispute 2 - Disallowance on account of hypothesis:
- The appellant raised a ground regarding the disallowance of Rs. 18,16,090 made by the AO on account of hypothesis, which was confirmed by the Ld.CIT(A).
- The disallowance was related to dividend income claimed as exempt u/s 10(33) of the Income Tax Act.
- The appellant cited previous Tribunal decisions in their favor for assessment years 2000-01 and 2001-02, and since no distinguishing facts were presented, the issue was decided in favor of the assessee.

Dispute 3 - Disallowance of expenditure on payments to clubs:
- The Revenue appealed against the deletion of Rs. 2,36,341 made by the AO for expenditure on payments to clubs, which was deleted by the Ld.CIT(A).
- The Ld.AR of the assessee argued that similar issues had been decided in favor of the assessee by the Tribunal in previous years, and since no distinguishing facts were presented, the deletion of the expenditure was upheld.

Dispute 4 - Disallowance of bad debts and liquidated damages:
- The Revenue appealed against the deletion of Rs. 66,58,662 on account of bad debts and liquidated damages made by the AO, which was deleted by the Ld.CIT(A).
- The Ld.AR pointed out previous Tribunal decisions in favor of the assessee for similar issues in previous assessment years, and since no material change in facts was presented, the deletion of the amount was upheld.

Dispute 5 - Disallowance of deduction claimed u/s 80HHC:
- The Revenue appealed against the disallowance made by the AO on deduction claimed u/s 80HHC, which was upheld by the Ld.CIT(A).
- The issue had been covered in favor of the assessee in previous years, and since no distinguishing facts were presented, the disallowance was upheld.

Conclusion:
- The appeal filed by the assessee was allowed, and that of the Revenue was dismissed, with the order pronounced on April 10, 2013.