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2012 (8) TMI 325 - AT - Income TaxBad Debts - dis-allowance on ground that assessee has not filed the necessary details - assessee contended that AO never asked any further details and it is not necessary to establish that the debt has become bad/ irrevocable - Held that:- Assessee has satisfied the conditions stipulated in section 36(2)(i) since these are business debts which could not be recovered and written off. Further, Supreme Court in the case of TRF Ltd vs. CIT (2010 (2) TMI 211 - SUPREME COURT) has held that it is not necessary to establish that the debt had in fact had become irrevocable after the provisions were amended w.e.f. 1.4.1989. bad debts stand allowed. Rebate u/s 88E - stock broking - assessee out of the gross income considered 5% of the expenditure whereas AO on assumption that assessee has not furnished any details of expenditure attributable to the above transactions and estimated the income at 25% of the gross expenditure - Held that:- As seen from the detailed schedules of the balance sheet, the stock in hand has gone up from Nil in earlier year upto Rs.1,46,27,156/-. It indicates that the borrowed funds were used for its business in trading transactions. If an analysis of the borrowed funds and its use was considered interest payment alone of Rs.22,80,089/- is attributable to the trading activity. Therefore, in our view AO is very conservative in attributing only 25% of the expenditure to the share trading activity. We uphold the action of AO Dis-allowance u/s 14A - Held that:- Even though on legal principles the matter is in favour of assessee, since assessee has not furnished any details of expenditure before AO and the working furnished was without prejudice to its claim. However in the interest of justice, matter requires re-examination by AO keeping in view of the principles laid down by the above cases and also to see there is any expenditure incurred in relation to the exempt income - Decided partly in favor of assessee.
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