2011 (1) TMI 1385 - AT - Income Tax

Summary

Issues involved: Appeal against orders of CIT(A) for respective assessment years, disallowance under sec.36(1)(viia) for Asst. year 1993-94, bad debt write off and disallowance under sec. 14A for Asst. year 2006-07.

For Asst. year 1993-94: The only ground raised by the assessee was regarding disallowance made under sec.36(1)(viia). The Committee on Disputes had declined permission for the assessee to pursue this issue before the Tribunal, leading to the dismissal of the appeal.

For Asst. year 2006-07: The first issue was regarding bad debt write off, which the Committee on Disputes had also declined permission for the assessee to pursue. The second issue was the disallowance of `24,27,875/- under sec. 14A. The AO had relied on Rule 8D and the decision of a Special Bench, but the assessee argued against the application of Rule 8D for earlier years. Various judicial decisions were cited, leading to the Tribunal's decision that the matter needed to be revisited by the AO based on the principles discussed.

Summary of Judgement: The Tribunal dismissed the appeal for Asst. year 1993-94 due to lack of permission to pursue the issue. For Asst. year 2006-07, the Tribunal allowed the second ground of the assessee regarding the disallowance under sec. 14A for statistical purposes. The Tribunal emphasized the need for the AO to reconsider the matter based on various judicial decisions and evidence to be produced by the assessee, ensuring a fair assessment of the disallowance under sec. 14A.