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2018 (6) TMI 520 - ITAT MUMBAIDisallowance of bad and doubtful debts of non rural branches - Held that:- following the decision of the Hon’ble Supreme Court in the case of Catholic Syrian Bank Ltd. vs. CIT [ 2012 (2) TMI 262 - SUPREME COURT OF INDIA] it is held that the bad debt written off in respect of non rural branches is allowable as deduction u/s. 36(1)(vii) - hence we direct the AO to allow deductions towards bad debt written off in respect of non rural branches. Disallowance of expenditure incurred in relation to exempt income u/s 14A - Held that:- in view taken by the Co-ordinate Bench in the assessee’s own case [2017 (10) TMI 583 - ITAT MUMBAI] for AY 2009-10, we direct the Assessing Officer to restrict the disallowance worked out u/s. 14A to 2% of the exempt income. Disallowance of diminution in value of investment held as stock-in-trade - Held that:- following the judgement in case of COMMISSIONER OF INCOME-TAX VERSUS BANK OF BARODA [2003 (3) TMI 80 - BOMBAY HIGH COURT]we are of the view that CIT was right in deleting the additions towards diminution in value of investment held as stock-in-trade - thus appeal filed by assessee is allowed and cross objection of revenue is dismissed. Disallowance of broken period interest - Held that:- CIT has deleted the additions made by AO following the judgement in case of American Express International Banking Corpn. Vs. CIT [2002 (9) TMI 96 - BOMBAY HIGH COURT]. Additions towards unreconciled credit entries in the nostro mirror accounts credited to P&L a/c - Held that:- where amount in question had remained with assessee-bank owing to fact that payees or holders of draft/pay orders had not encashed them, section 41(1) could not be invoked - thus unreconciled credit entries cannot be treated as income of the assessee - AO is directed to delete the addition.
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