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2014 (2) TMI 1080 - HC - Income TaxBad debt u/s 36(1)(viia) of the Act - Whether the Tribunal is correct in law and fact in holding that the bad debt relating to the non- rural branches in excess of the credit balance of the provisions for bad debts created u/s 36(1)(viia) alone is admissible for deduction u/s 36(1)(vii) of the Act – Held that:- The provisions of Section 36(1)(vii) and (viia) of the Income Tax Act are distinct and independent items of deduction and operate in their respective fields - the proviso would not permit the benefit of double deduction operating with reference to rural loans while, under Section 36(1)(vii), the assessee would be entitled to general deduction upon an account having become bad debt and being written off as irrecoverable in the accounts of the assessee for the previous year – Decided in favour of Assessee. Disallowance of claim for leave encashment – Held that:- The opinion of the Tribunal so far as disallowance claimed in respect of leave encashment under Section 43B(f) of the Act, as on today, the provision seems to be in force in the light of the stay order granted - as long as Section 43B(f) is on Statute, the disallowance is justified. Trade surplus on sale of jewellery - Whether the Tribunal is correct in holding that the surplus outstanding in the appellant's accounts acquired the character of trade surplus when the appellant had not credited the sum in their P&L account and there is nothing to show that there is cessation of the liability – Held that:- The decision in Catholic Syrian Bank Ltd. CIT (Asst.) [2012 (2) TMI 262 - SUPREME COURT OF INDIA] followed – The amount is reflected in the account for long time over number of years as trade surplus amount it has to be considered as income as observed by the Tribunal - there is no fault with the opinion of the Tribunal – thus, the appeal is partly allowed – Decided against assessee.
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