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2017 (4) TMI 1337 - AT - Income TaxDisallowance u/s.14A - Held that:- In absence of any exempt income no disallowance could be made u/s.14A of the Act.Considering the facts-like availability of sufficient own funds, non-receipt of exempt income during the year, and strategic investment in the sister concerns we hold that no justification in upholding the disallowance. See case of HDFC Bank Ltd.(2016 (3) TMI 755 - BOMBAY HIGH COURT) Strategic investment disallowance u/s rule 8D - Held that:- We direct the AO to restrict the disallowance under rule 8D(2)(iii)of the Rules @ of 0.05% of the average investment.But,strategic investment should not be considered for computing the disallowance.Second ground is allowed in favour of the assessee,in part. Disallowance of bad debts - Held that:- As decided in Catholic Syrian Bank Ltd. [2012 (2) TMI 262 - SUPREME COURT OF INDIA] 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. Thus, the proviso would not permit benefit of double deduction, operating with reference to rural loans. Therefore, we hold that provisions of Sections 36(1)(vii) and 36(1)(viia) are distinct and independent items of deduction and operate in their respective fields – Decided in favor of assessee. Bad debts written off computation - whether to be computed not only with opening balance but also with the closing balance? - Held that:- Direct the Assessing Officer to allow deduction under section 36(1)(vi), without taking into account the admissible deduction under section 36(1)(viia)(b) for the relevant previous year, which, in our considered view, can only be taken into account for computing deduction under section 36(1)(vi) for subsequent year(s). See Oman International Bank SAOG [2013 (2) TMI 757 - BOMBAY HIGH COURT] Deduction @7.5%,u/s.36(1)(vii)on the assessed Gross Total Income (GTI) - Held that:- We find that the assessee had moved an application under section 154 of the Act, in that regard. On a query by the bench, it was stated that the AO had not passed the recognition order. The AO is directed to dispose off the application, filed by the assessee, as per the orders of the FAA within a period of one month from the date of receipt of our order. Not able to reconcile difference on account of transactions listed in the AIR information - Held that:- We find that there was discrepancy in the figures appearing in the books of accounts of the assessee and the AIR data of the Department, that it reconcile all the the discrepancies except for a sum of ₹ 1.40 lakhs, that it had requested the AO to grant it sometime to reconcile the figure, that even before the FAA the assessee did not produce any reconciliation statement, that he directed the AO to re-examine the issue.. In our opinion the order of the FAA does not suffer from any legal infirmity.It was the duty of the assessee to reconcile the discrepancy. The FAA had not confirmed the order of the AO and had given one more chance to the assessee.. We are not inclined to interfere with the order of the FAA. Non grant of TDS credit certificate - Held that:- AO is directed to verify the claim made by the assessee.If credit has not been given till date,he should pass the necessary order within a period of one month from the date of receipt of the our order.
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