2012 (9) TMI 95 - AT - Income Tax

India-Thailand DTAA - Disallowance of Transponder Service Fee and consultancy charges - non deduction of TDS - Held that:- Disallowance on relying on explanation 5 to sec.9(1)(vi) and Explanation 6 to sec.9(1)(vi) cannot be warranted as the assessee cannot be held to be liable to deduct tax at source relying on the subsequent amendments made in the Act with retrospective effect. In the said case, Explanation to sec.9(2) was inserted by the Finance Act, 2007 with retrospective effect from 1.6.1976 and it was held by the Tribunal that it was impossible for the assessee to deduct tax in the financial year 2003-04 when as per the relevant legal position prevalent in the financial year 2003-04, the obligation to deduct tax was not on the assessee - the law cannot possibly compel a person to do something which is impossible to perform - in favour of assessee.

Disallowance of higher rate of depreciation on vehicles given on lease - Held that:- Considering the Tribunal's order in assessee's own case for AY 1998-99 the matter is restored back to the file of the AO to decide the same afresh after giving the assessee an opportunity to produce all the evidence to support and substantiate its claim for higher rate of depreciation on the vehicles given on lease - in favour of assessee for statistical purposes.

Disallowance of bad debts written off - Held that:- As decided in T.R.F. LTD. Versus COMMISSIONER OF INCOME-TAX [2010 (2) TMI 211 - SUPREME COURT] in order 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 of the bad debt is written off as irrecoverable in the accounts of the assessee - in favour of assessee.