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2018 (12) TMI 836 - KERALA HIGH COURTDis-allowance of bad debts written off u/s 36(1)(vii) - Held that:- In South Indian Bank Ltd. v. CIT [[2018 (12) TMI 682 - KERALA HIGH COURT] already found the issue against the assessee and in favour of the Revenue. This Court had also noticed the decision of the Hon'ble Supreme Court in Southern Technologies Ltd. v. Joint CIT [2010 (1) TMI 5 - SUPREME COURT OF INDIA] wherein the Gujarat High Court decision was reversed. Disallowance of expenditure incurred u/s 14A - Held that:- As decided in ESSAR TELEHOLDINGS LTD. THROUGH ITS MANAGER [2018 (2) TMI 115 - SUPREME COURT OF INDIA] Section 14A would be applicable only from the year 2007-08. In the present appeals arising from the prior years, the dis-allowance made by the AO under Section 14A as affirmed by the Tribunal, has to be set aside. The question is answered in favour of the assessee and against the Revenue. Levy of interest under Section 234B - Held that:- The question has already been answered in favour of the Revenue and against the assessee in South Indian Bank Ltd. v. CIT [2014 (2) TMI 1080 - KERALA HIGH COURT]. Dis-allowance of provision for leave encashment under Section 43B - Held that:- Section 43B spoke of certain deductions only on actual payment. Sub-clause (f) is with respect to any sum payable by the assessee as an employer in lieu of any leave at the credit of his employee. The deduction, hence, is allowable only on actual payment. It is submitted that the Calcutta High Court has struck down the said provision. Admittedly a Special Leave Petition was filed before the Hon'ble Supreme Court and there is also a stay order granted. In such circumstances, the provision applies and this Court has also in a similar case answered the question in favour of the Revenue and against the assessee in South Indian Bank Ltd. v. CIT [2009 (12) TMI 394 - KERALA HIGH COURT]. Dis-allowance of bad debts of non-rural Banks written off under Section 36(1)(vii) - Held that:- In considering the allowance of deduction of actual written off debts under sub-clause (vii) of Section 36(1) with respect to urban bad debts as distinguished from rural bad debts, for which provision is allowable under sub-clause (viia), the same cannot be with reference to the provision under sub-clause (viia). The write off of non-rural bad debts under sub-clause (vii) has been found by the Hon'ble Supreme Court in CATHOLIC SYRIAN BANK LTD. [2012 (2) TMI 262 - SUPREME COURT OF INDIA] to be independent of the provision for rural bad debts made under sub-clause (viia). In such circumstances, the question has to be answered in favour of the assessee and against the Revenue, with only reservation as to examination of whether any provision for non-rural bad debts has been granted deduction in the previous assessment year. If there is a deduction allowed for provision for non-rural bad debts, then necessarily the allowance for write off has to be only that in excess of the deduction granted for the provision. We make it clear that what we have directed the AO to examine is only as to whether there is an allowance granted for provision of non-rural bad debts in the earlier assessment year; without any reference to the rural bad debts, the provision for which has been granted deduction under sub-clause (viia). Addition of amortisation of expenses incurred in connection with the issue of public subscription of shares under Section 35D - whether assessee being not an 'industrial undertaking' - Held that:- this Court would answer the question in favour of the assessee and against the Revenue, finding the appellant-assessee to be eligible for the claim under Section 35D. The actual expenditure, whether it comes within Section 35D(2)(c)(iv) would be left for consideration by the AO. Disallowance of expenses relating to right issue in view of the decision of the Supreme Court in the case of Brooke Bond India Ltd. vs. CIT [1997 (2) TMI 11 - SUPREME COURT] - decided against assessee.
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