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2012 (8) TMI 230 - AT - Income TaxAddition on account of discount allowed by the State Government on early repayment of deferred sales tax, loan holding the same to be income of the assessee for the year and not a capital receipt as claimed by the assessee - difference between the payment made against the future liability on account of deferred sales-tax is a capital receipt and could not be treated as a remission of cessation of liability assessable under section 41(1)(1) of the Act - addition made by the Assessing Officer in the instant case by invoking the provisions of section 41(1) of the Act is untenable – In favor of assessee Addition on account of debit balance written off on reconciliation – Held that:- Claim is on account of small balances, which were outstanding from the various customers on account of rejections, counting shortage etc., Since the amounts were not recovered, the same have been written off as irrecoverable - lower authorities were not justified in rejecting the claim of the assessee - ground raised by the Revenue is accordingly dismissed. Guarantee commission paid to the Directors of the Company – Held that:- What the company loses by way of guarantee commission, it would gain by saving of interest and avoidance of restrictive covenants. The payment of guarantee commission was, therefore, commercially justified - payment, therefore, could not be called in question as being influenced by any extra-commercial considerations and it must be taken that it passed all the test laid down in section 40(c) - whole of the guarantee commission shall be allowed - guarantee commission was not excessive and was an allowable deduction - ground raised by the Revenue is accordingly dismissed. Applicability of Clause (ii) of sub-rule(2) of Rule 8(D) of the I.T. Act - funds of the assessee are from a common pool and there was no exclusively pertaining to capital expenditure on purchase of equipment - assessee received Dividend income which it claimed as exempt - assessee has an outstanding loan - on which it has paid interest – Held that:- Matter remanded to the file of the AO for making reasonable disallowance under section 14A r.w. Rule 8D in the light of the decision of the Hon’ble Bombay High Court in the case of Godrej & Boyce Manufacturing Company ltd. (2010 (8) TMI 77 - BOMBAY HIGH COURT ) - Assessee is Partly-allowed.
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