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2014 (11) TMI 677 - AT - Income TaxClaim of deduction u/s 36(a)(viia) - Provision for Bad & doubtful Debts - Held that:- There is debit on account of bad debts written of and there is no other debit on account of provision for bad debt - The computation of income (original), there is no deduction claimed by the assessee on account of any provision for bad debts - As per the revised computation also, there is no such claim regarding provision for bad debts u/s 36(1)(viia) of the Act - it is not clear if it were rural or urban bad loans and further as reserve had been created, the write off has to be limited to the amount of reserve created - He is alleging that the assessee is taking double deduction u/s 36(1)(vii) and 36(1)(viia) of the Act - the assessee is claiming only one deduction u/s 36(1)(vii) that too in respect of actual write off of bad debt and not for any provision for bad debt – also in TRF. LTD. Versus COMMISSIONER OF INCOME-TAX [2010 (2) TMI 211 - SUPREME COURT] the same has been decided - But even then it has to be seen that the assessee is satisfying the requirement of section 36(2) of Income Tax Act – thus, the matter is remitted back to the AO – Decided in favour of assessee. Membership fees disallowed u/s 37(1) - Held that:- In CIT vs. Samtel Color Ltd. [2009 (1) TMI 26 - DELHI HIGH COURT] it was held that the expenditure being admission fee paid towards corporate membership was an expenditure incurred wholly and exclusively for the purpose of business and not towards capital account - divergent views are there on the issue and therefore, as held in Commissioner of Income-tax Vs Vegetable Products Ltd. [1973 (1) TMI 1 - SUPREME Court], the view favourable to the assessee should be followed – Decided in favour of assessee. Medical expenses disallowed – Held that:- There is date mentioned and amount mentioned and the amounts have been debited to account head medical expenses of Managing Director but in addition to this ledger account copy, there is no other evidence brought on record as to whether these expenses were incurred for medical expenditure of the Managing Director and whether the same is as per his terms of appointment - the assessee was asked to produce information regarding nature of illness, amount incurred on various tests, investigations surgery, travelling etc. regarding the above illness but no such details were produced before him and it was merely stated that it is for the treatment of Managing Director hence allowable – Decided against assessee.
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