TMI Blog2014 (1) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... . Disallowance as bad debts twice while computing disallowance u/s 14A of the Act – Held that:- It amounts to making addition twice, which is not sustainable in law - assessee mentioned that there cannot be disallowance u/s 14A of the Act in respect of the claim of bad debts – relying upon Star Television Entertainment Ltd [2010 (1) TMI 46 - AUTHORITY FOR ADVANCE RULINGS] - The claim of the bad debts is allowable in favour of the assessee – the issue remitted back to the AO for fresh adjudication after considering on bad debts - the expenditure of bad debt is outside the scope of the provisions of section 14A r w r 8D – Decided partly in favour of Assessee. - I.T.A. No.3534/M/2012 - - - Dated:- 3-7-2013 - Shri D. Manmohan And Shri D. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rable. On this issue, the matter travelled to the first appellate authority, where the assessee relied on the judgment of jurisdictional High Court in the case of DIT (Int. Tax) vs. Oman International Bank SAOG, 313 ITR 128 (Bom), which is relevant for the proposition that mere write off in the books of accounts tantamounts to the badness of the debts and assessee is entitled to deduction. Assessee also relied on the judgment of the Hon'ble Supreme Court in the case of TRF Ltd vs. CIT, which is relevant for the proposition that it is not necessary for the assessee to establish the debt has become bad and irrecoverable. In fact, it is enough that the debt is written as irrecoverable in the accounts of the assessee. Without any discussion, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouncements. Thus, we are of the opinion that the assessee is entitled to relief on account of bad debts in view of the cited Supreme Court and jurisdictional High Court judgments. Accordingly, ground no.1 is allowed. 4. Ground no.2 raised without prejudice so far as the applicability of section 14A read with Rule-8D of the Act. During proceedings before us, it is mentioned that assessee earned dividend income amounting to Rs. 61,10,010/- and not attributed any expenditure for earning of such income. AO relied on the Special Bench decision in the case of ITO vs. Daga Capital Management (P) Ltd, 119 TTJ (Mum) and others and invoked the provisions of Rule-8D and quantified the disallowance of Rs. 3,43,650/-. While computing the AO considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14A of the Act in respect of the claim of bad debts and relied on the decision in the case of Star Television Entertainment Ltd [2010] 321 ITR 001. Ld Counsel for the assessee prayed to send the matter to the files of the AO for fresh adjudication of the issue. He mentioned that by virtue of the CIT (A)'s decision on ground no.1 relating to bad debts and also on account of section 14A disallowance, assessee suffered the addition twice with regard to the bad debts claims under different provisions and it requires correction. 7. On the other hand, Ld DR relied on the order of the Revenue Authorities. 8. We have heard both the parties and perused the order of the Revenue Authorities as well as the decisions cited by the Ld Representatives ..... X X X X Extracts X X X X X X X X Extracts X X X X
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