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2015 (3) TMI 1184 - AT - Income TaxDisallowance of bad debts written off - Held that:- After the decision of TRF Ldt.(2010 (2) TMI 211 - SUPREME COURT ) the legal position is very clear and that is to obtain a deduction in relation to bad debts, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable :it is enough if the bad debt is written off as irrecoverable in the accounts of the assessee. We have gone through the paper book of the assessee and it is found that amount in question has been actually written off. We further find that issue of bad debts has been decided in favour of the assessee by the Tribunal while deciding the appeal for the AY. 2005-06 - Decided in favour of the assessee Disallowance u/s. 14A - Held that:- The undisputed facts of the case are that the assessee had received tax free dividend income,that it was maintaining overdraft account, that it was not possible to link investment and availability of funds. If the assessee has sufficient funds and reserves then it has to be accepted that investment has been made out of such funds.But,the availability of funds has to be proved.We find that in the matter of mutual funds it may not be true. The assessee had made an alternate argument and we are of the opinion that considering the facts of the case,in the interest of justice, matter should be sent back to the file of the AO to determine the interest disallowance within the parameters of the alternative argument. As far as administrative disallowance is concerned,we are of the opinion that disallowance @ 1% will be sufficient to meet the end of justice.Ground of no.2 is decided in favour of the assessee,in part. Deduction on account of retention money - AO had disallowed the deduction on account of retention money because assessee had not claimed it at the time of filing of return and that it had not filed revised return - CIT(A) allowed the claim - Held that:- As an appellate authority, if the FAA had admitted the new claim then in our opinion he has rightly applied the provisions of law. Upholding his order, we decide ground against the AO.
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