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2015 (2) TMI 982 - ITAT BANGALOREDisallowance u/s 40(a)(ia) - Held that:- Following the decision of CIT v/s VIRGIN CREATIONS [ 2011 (11) TMI 348 - CALCUTTA HIGH COURT ] amendment to the provisions of section 40(a)(ia) of the Act, by the Finance Act, 2010 is retrospective from April 1, 2005. Consequently, any payment of tax deducted at source during the previous years relevant to and from the assessment year 2005-06 can be made to the Government on or before the due date for filing return of income under section 139(1) of the Act. If payments are made as aforesaid, then no deduction under section 40(a)(ia) of the Act can be made. Admittedly in the present case, the assessee had deposited the tax deducted at source on or before the due date for filing return of income under section 139(1) of the Act and therefore the impugned disallowance deserves to be deleted - Decided in favour of assessee. Deduction on account of bad debts written off - CIT(A) allowed the claim - Held that:- In the case of Sabra Impex Ltd. (2011 (3) TMI 1553 - ITAT MUMBAI) a consistent view has been taken that non-realisation of export proceeds from a foreign party can be considered as a bad debt and written off and claimed as a deduction. It was also held that the fact that permission of the Reserve Bank of India has not been obtained for such write off will not be a bar to claim deduction on account of such bad debts written off.As far as the issue of applicability of the Explanation to section 37(1) of the Act is concerned, we are of the view that the aforesaid Explanation will apply only when an expenditure is incurred for any purpose which is an offence or which is prohibited by law. In our view, the sale proceeds to be received from a foreign buyer which already shown as income and which is now written off as irrecoverable, cannot be said to be an expenditure incurred by the assessee for any purpose which is an offence or which is prohibited by law. - Decided against revenue.
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