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2012 (10) TMI 16 - ITAT MUMBAIDisallowance of expenditure incurred on earning exempt income u/s 14A – AO contention that a certain percentage of the expenses claimed by the assessee would be definitely attributable to the tax free income earned - AO, therefore, estimated the ratio of exempt income to total income – Following the decision in case of Godrej & Boyce Mfg. Co. Ltd. (2010 (8) TMI 77 - BOMBAY HIGH COURT) computation of disallowance has to be made at a reasonable basis, considering the fact that the assessee has not incurred any expenditure, specifically for the earning of exempt income. Issue remand back to AO Disallowance of bad debts – Held that:- Assessee has not furnished any evidence in support of its claim that the said debt had become ‘bad’. It has not produced anything in respect of its claim that the said party had expressed its inability to make payment. Assessee is bound to explain the measures he has taken before arriving at the conclusion that the debt has become bad. Therefore issue remand back to AO Disallowance of STT – Said expense pertained to client on whose behalf we have executed the saudas and the STT pertaining to those saudas is borne by the assessee – AO disallow the same that expenditure which is specifically prohibited cannot be allowed as an expenditure even if it pertains to someone else – Held that:- In so far as the question of revenue is concerned, there is no revenue loss to the exchequer, because the assessee is making that payment, which in any case, also it would have been the assessee only to make the payment, it is only a simple case of book entry, because neither the STT nor the service tax, though collected under the gross amount has been paid off. It is just a case of alternate book entries, which does not call for any addition on this account. Therefore appeal decides in favour of assessee
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