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2010 (2) TMI 945 - HC - Income TaxWhether Tribunal was legally justified in allowing the assessee's claim for deduction on account of rent paid to the hotel close to the factory and transit house in contravention of the provisions of section 37(4) read with section 37(5) of the Income-tax Act, 1961 - Tribunal was not justified in allowing the claim for deduction on account of the rent paid by the assessee to the M/s. Modipur Hotels (P) Ltd. and transit house as it contravened the provisions of section 37(4) read with section 37(5) of the Act - In favour of the Revenue Whether the payment made by the assessee towards the membership of the club is an allowable deduction - expenditure was incurred in order to procure business – Held that:- Intention has to be seen as the amount was spent towards advancement of business - It is a business expenditure and, therefore, has rightly been allowed as it is not specifically covered by any statutory provision wherein it has to be disallowed - In favour of the assessee Claim of bad debts – disallowance - assessee thought that it was uneconomical to file suits against such defaulting clients no suits were filed – Held that:- This alone cannot be a ground for disallowing the claim of bad debts - After amendment to the provisions of section 36(2) read with section 36(1)(vii) of the Act if the amount has been considered for computation of income in the earlier years and the debt has been written off in the books of account it was sufficient to allow the claim of bad debts - assessee has complied with both the requirements, namely, that the amount has been considered for computation of income in the earlier years and the debt has been written off in the books of account – In favor of assessee. Whether Tribunal was justified in directing the Assessing Officer to allow the under section 43B – Held that:- In the case of Berger Paints India Ltd. (2004 (2) TMI 4 (SC)) it was held that the entire amount of excise duty/customs duty paid by the assessee in a particular accounting year is allowable under section 43B of the Income-tax Act, 1961, as a deduction in respect of that year, irrespective of the amount of excise duty/customs duty included in the valuation of the assessee's closing stock at the end of the accounting year as relating thereto - In favour of the assessee
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