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2017 (10) TMI 583 - ITAT MUMBAIAddition u/s 14A - expenses attributable to earning income on account of dividend and interest which does not from part of the total income - Held that:- In the case of "Godrej & Boyce Manufacturing Co. Ltd. V/s DCIT (2017 (5) TMI 403 - SUPREME COURT OF INDIA) wherein it has been held that the AO has to record the satisfaction that the assessee has incurred any expenditure in relation of the earning of earning income after examining the records and books of accounts maintained by the assessee and thus the AO has to be record his satisfaction with regard to the correctness of the claim of the assessee otherwise the provisions of section 14A can not be applied. We find merit in the plea of the ld.AR that in absence of any satisfaction recorded by the AO no disallowance could be made u/r 14A r.w.rule 8D. However, to maintain the consistency with the decision of the co-ordinate bench of the Tribunal, we think it fit and reasonable which has been an alternative prayer by the counsel during the course of hearing that the disallowance of 2% be made as has been made by the Tribunal in the assessment year 1998-99 and 1999-2000 Bad debts disallowance u/s 36(1)(vii) - Held that:- As decided in u/s Catholic Syrian Bank Ltd. Versus CIT [ 2012 (2) TMI 262 - SUPREME COURT OF INDIA ] 36(1)(vii), the assessee would be entitled to general deduction upon an account having become bad debt and being written off as irrecoverable in the accounts of the assessee for the previous year, while the proviso will operate in cases under clause (viia) to limit deduction to the extent of difference between the debt or part thereof written off in the previous year and credit balance in the provision for bad and doubtful debts account made under clause (viia). The proviso to Section 36(1)(vii) will relate to cases covered under Section 36(1)(viia) and has to be read with Section 36(2)(v) of the Act. if the amount of bad debt(s) actually written off in the accounts of the bank represents only debt(s) arising out of urban advances, the allowance thereof in the assessment is not affected, controlled or limited in any way by the proviso to clause (vii). Taxability of the interest relating to the broken period after due date of interest till the close of accounting year - Held that:- As perused the decision in the case of Director of Income tax (int.Tax. V/s Credit Suisse First Boston (Cyprus)ltd (2012 (8) TMI 17 - BOMBAY HIGH COURT) and find that the identical issue has been decided by holding that the said interest is not liable to tax qua the broken period
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