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2015 (2) TMI 666 - HC - Income TaxDisallowanc on account of bad debts - ITAT deleted the addition - Held that - Tribunal correctly in view of the decision of TRF Ltd. vs. CIT 2010 (2) TMI 211 - SUPREME COURT has held against the revenue. - Decided in favor of assessee. Disallowance on account of interest expenditure u/s 14A r.w.r. 8D - ITAT deleted the addition - Held that - As relying on case of CIT vs. Reliance Utilities and Power Ltd. (2009 (1) TMI 4 - HIGH COURT BOMBAY) wherein held that if there were funds available both interestfee and overdraft and/or loans taken, then a presumption would arise that investments would be out of the interestfree fund generated or available with the company, if the interestfree funds were sufficient to meet the investments. Thus no reason to interfere in the said issue when both the Authorities have concurrently held that there were sufficient funds available with the company and they held in favour of the assessee. - Decided in favor of assessee.
Issues:
1. Disallowance of bad debts pertaining to a Joint Venture. 2. Disallowance of interest expenditure under section 14A r.w.r. 8D. Analysis: 1. The first issue pertains to the disallowance of bad debts amounting to &8377;1,03,21,009 related to a Joint Venture for work concerning MSRDC. The Tribunal, citing the decision in TRF Ltd. vs. CIT, ruled against the revenue. The High Court found no substantial question of law as the matter was already addressed by the Apex Court, leading to the dismissal of the appeal. 2. The second issue involves the disallowance of interest expenditure under section 14A r.w.r. 8D, resulting in the deletion of &8377;15,52,448. The Tribunal's decision was based on a judgment of the Bombay High Court in CIT vs. Reliance Utilities & Power Ltd. The High Court noted a similar stance taken in a previous case and emphasized that there were sufficient funds available with the company, leading to a presumption that investments were made out of interest-free funds. The Court declined to interfere in the matter, as no substantial question of law was found, especially since the Revenue failed to provide any material to challenge the CIT(A)'s findings. The Court concluded that the appeal lacked merit and was subsequently dismissed.
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