9911796707
TMI Blog2012 (6) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... fect would have been same. Hence CIT(A) has rightly deleted the dis-allowance - Decided in favor of assessee. Reduction of excess provision back - partial dis-allowance u/s 14A - dividend income - Held that:- Matter restored to file of AO for fresh examination. - IT APPEAL NO. 547 (COCH.) OF 2010 - - - Dated:- 8-6-2012 - N.R.S. GANESAN, B.R. BASKARAN, JJ. ORDER B.R. Baskaran, Accountant Member The appeal of the revenue and the Cross objection filed by the assessee are directed against the order dated 14.07.2010 passed by Ld CIT(A)-1, Trivandrum and they relate to the assessment year 2007-08. 2. The revenue is assailing the decision of Ld CIT(A) in respect of following issues:- ( a ) Deletion of disallowance of bad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lates to the disallowance of claim of bad debts. The AO disallowed the claim mainly on the ground that the assessee has failed to comply with the provisions of sec. 36(2)(v). The assessee wrote off bad debts to the tune of Rs. 7,51,13,359/-. The balance outstanding in the "Provision for Bad debts a/c" was Rs. 1,81,00,000/-. After adjusting the provision account against the bad debts amount cited above, the balance of bad debts amounting to Rs. 5,70,13,359/- (Rs. 7,51,13,359 less Rs. 1,81,00,000/-) was debited to the Profit and Loss account. The case of the AO was that the assessee should have debited the entire amount of Rs. 7,51,13,359/- to the "Provision for bad debts a/c". Since the assessee has debited only a sum of Rs. 1,81,00,000/- to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the accounting principles the provision account can only have credit balance and on account of making debits in that account, if the said provision account is converted into a debit balance account, then the Provision account has to be closed by transferring the debit balance to the Profit and Loss account. Accordingly, even if the assessee debits the entire bad debts amount of Rs. 7.51 crores to the Provision account, then the Provision account will show a debit balance of Rs. 5.70 crores which has to be closed by transferring it to the Profit and Loss account. Instead of following this circuitous methodology, the assessee has herein has debited the Provision account with the available balance of Rs. 1.81 crores and debited the Profit a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... day of the previous year from which the assessee had received dividend. 12. Before us, the assessee has placed reliance on the decision of Hon'ble Karnataka High Court in the case of M/s CCI Ltd in ITA No.359 of 2011. We have carefully gone through the said decision and we notice that the assessee therein has treated the dividend income as its business income, as it was indulging in trading of shares. However, the position available in the instant case is not clearly borne out of record. We further notice that the Tribunal has considered this issue in the assessee's own case relating to the assessment year 2003-04 to 2005-06 in ITA Nos. 200 to 202/Coch/2009. In that order, the Tribunal has taken note of the decision of Jurisdictional H ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
