9911796707
TMI Blog2022 (8) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... e India, which are directly attributable to the Appellant's business operations in India aggregating to Rs. 5,14,40,312. 2. The Ld. CIT(A) has erred in law by upholding the disallowance of 1/5th expenses incurred on Early Retirement Scheme u/s.35DDA amounting to Rs.59,32,163. 3. The Ld. CIT(A) has erred in law and on facts by upholding the disallowance of bad debts written off in the accounts of Rs. 10,78,12,469. 3. The assessee M/s Standard Chartered Grindlays Bank incorporated in Australia and engaged in banking business. It has opened up various offices all over the country in India that constitute PE of the non-resident bank. During the year, the Standard Chartered Grindlays Bank was merged with Standard Chartered Bank, UK w.e.f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness. The costs directly pertaining to Indian business are not subjected to the provisions of Section 44C of the Act and hence, appeal of the assessee on this ground is allowed. Early Retirement Scheme- (ERS): 7. The assessee incurred expenses of Rs.2,96,60,815/- under Early Retirement Scheme (ERS) and had claimed Rs.59,32,163/- being 1/5th of such expenditure as deduction u/s.35DDA. The AO disallowed expenses on the ground that the assessee did not furnish evidence of persons who retired during the year and given compensation under separation scheme. The provisions of Section 35DDA and the observations of the Assessing Officer are as under: "In schedule- F of Financial Statements, the assessee has claimed that it has incurred on amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disclosed. Further the actual expenses incurred has been duly verified by the auditors. The claim of the assessee for the said deduction has been made in accordance with section 35DDA of Rs. 59,32,163/- being 1/5th is allowable Rs. 2,96,60,815/-. It was argued that the Books of Accounts have been accepted as reliable by the Assessing Officer. There is no allegation of any incorrect claim or false statement. These claims have been examined and certified by external auditors who verify each and every document at the time of audit. Hence these expenses having been authenticated by auditors, and the Books of accounts having been accepted, there is no factual basis for disallowing the legitimate claim of expenses. It was further argued that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of retired employees all over India and inability to provide such details for their own benefit points to the efficient functioning of the bank itself. When the bank itself cannot be organized their own affairs, it will be very difficult to gain the public trust to part and park their hard earned amounts with the bank. 10. Since, no details have been submitted so far and as the ld. Counsel has argued that the details are being collated, the matter is being referred to the file of the Assessing Officer to examine the issue afresh after the assessee submits the list of eligible employees of the retirement scheme and to take a decision in accordance with the Income Tax Act. Allowability of Bad debts: 11. The AO disallowed the assessee's c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in which such debt or part thereof becomes irrecoverable and it shall be deemed that such debt or part thereof has been written off as irrecoverable in the accounts for the purposes of this clause. [Explanation 1].-For the purposes of this clause, any bad debt or part thereof written off as irrecoverable in the accounts of the assessee shall not include any provision for bad and doubtful debts made in the accounts of the assessee; [Explanation 2.-For the removal of doubts, it is hereby clarified that for the purposes of the proviso to clause (vii) of this subsection and clause (v) of sub-section (2), the account referred to therein shall be only one account in respect of provision for bad and doubtful debts under clause (viia) and su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viso shall have effect as if for the words "five per cent", the words "ten per cent" had been substituted : Provided also that a scheduled bank or a non-scheduled bank referred to in this sub-clause shall, at its option, be allowed a further deduction in excess of the limits specified in the foregoing provisions, for an amount not exceeding the income derived from redemption of securities in accordance with a scheme framed by the Central Government: Provided also that no deduction shall be allowed under the third proviso unless such income has been disclosed in the return of income under the head "Profits and gains of business or profession." Explanation.-For the purposes of this sub-clause, "relevant assessment years" means the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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