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2016 (3) TMI 1177 - ITAT MUMBAIDisallowance of bad debts - Provision for doubtful debts - Held that:- As in the case of UTI Bank Ltd.(2013 (1) TMI 209 - GUJARAT HIGH COURT) as dealt the issue in light of the Instruction No.17/2008 dated 26.11.2008 the issue has been made sufficiently clear(i) u/s 36(1)(vii), deduction on account of bad debts which are written off as irrecoverable in the accounts of the assessee is admissible. However, this should be allowed only if the assessee had debited the amount of such debs to the provision for bad and doubtful debt account u/s 36(1)(viia), as required by section 36(2)(v) - (ii). While considering the claim for bad debts u/s 36(1)(vii), the A.O. should allow only such amount of bad debts written off as exceeds the credit balance available in the provision for bad & doubtful debt account created u/s 36(1)(viia). The credit balance for this purpose will be the opening credit balance i.e., the balance brought forward as on 1st April of the relevant accounting year.Therefore, bearing in mind the circular issued by CBDT dated 26-11-2008 appeal decides in favour of assessee Denial of set off of brought forward capital loss against short term capital gain u/s. 74 - Held that:- Similar issue had arisen in the case of one of the group entities i.e. Kotak Mahindra Capital Co.Ltd [2012 (8) TMI 339 - ITAT MUMBAI] as held that the provisions of sec.74 which deal with carry forward and set off of losses under the head “capital gains” as amended by Finance Act, 2002, will apply only to the unabsorbed capital loss for the assessment year 2003-04 and onwards and will not apply to the unabsorbed capital losses relating to the assessment years prior to the assessment year 2003-04. Accordingly, we answer the question referred to this Special Bench in favour of the assessee holding that the assessee is entitled to set off the longterm capital loss incurred in AY 2001-02 against the short-term capital gain made by it in AY 2003-04 - Decided in favour of assessee Administrative expenses disallowed u/s. 14A - Held that:- We find that a lumpsum disallowance of 1%/2% of the dividend income has been upheld in Tata Consulting Engineers Ltd [2015 (3) TMI 1184 - ITAT MUMBAI], M/s HDFC Bank Ltd [2011 (6) TMI 774 - ITAT MUMBAI ] .Therefore,upholding the order of the FAA,we decide first Ground of Appeal against the AO. Disallowance of club entrance and subscription fee - issue stands decided in favour of the assessee Disallowance of exemption claimed u/s.54EC - AO held that capital gain under consideration was taxable as short term capital gain as per the provisions of section 50C - Held that:- We find that in the case of Ace Builders (2005 (3) TMI 36 - BOMBAY High Court) has held that section 50 treats capital gain arising on transfer of capital asset as STCG, that capital assets u/s.50 are all long term capital assets,that they do not loose their character of being long term capital assets merely on the ground that capital gains was being taxed u/s.50 of the Act, that the provisions of sec.54EC would continue to remain applicable to the capital assets eventhough the capital gain is charegeable u/s.50.Respectfully following the above judgment of Hon'ble Jurisdictional High Court we hold that assessee is entitled to deduction u/s. 50EC.Last ground of appeal is decided against the AO.
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