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2015 (1) TMI 1009 - AT - Income TaxDisallowance on account of Bad debts - CIT(A) deleted the addition - Held that:- No material could be brought before us to show that the Ahmedabad Stock Exchange has given any assurance to meet the entire debt to the assessee which was receivable by the assessee from Shri Nagindas Chandulal Shah who was declared as defaulter by the stock exchange. Thus, in our considered view, as the broker from whom the debt was receivable has in fact become bad during the year under consideration and the assessee had not acquired any legal right to receive the same debt from Ahmedabad Stock Exchange. In our view, merely lodging of a claim does not give rise to a legal right in favour of the assessee. Further, in our considered view, after assessing badla interest as business income of the assessee, it was not open to the Assessing Officer to allege on the same breath that the transactions of giving shares in the badla transaction was not a business of the assessee. Further, in such a transaction, as per the system of accounting, simply because net badla interest was credited in the profit and loss account, it cannot be held that the entire sale value of the shares was not taken into consideration for computing the income of the assessee. Moreover, we find that it is an admitted fact that the amount in question when received in the subsequent year by the assessee, the same was assessed to tax by the Revenue in the hands of the assessee in the year of receipt. In the above facts, we do not find any good reason to interfere with the order of the CIT(A) which is hereby confirmed. - Decided against revenue. Disallowance on account of foreign travelling expenses - assessee had not furnished details of expenses of wife and children - CIT(A) deleted the addition - Held that:- It is not in dispute that the wife of the assessee is also a Director of the assessee-company and assessee claimed before the Assessing Officer that the expenditure of wife of the Director who is also a Director and looks after the business of the assessee-company was for the purpose of business. We find that no material was brought on record by the Revenue to controvert the above submissions of the assessee. Further, it is observed that the CIT(A) deleted the entire disallowance by observing increase in export turnover of the assessee-company without bring on record any material to show how the expenditure of children of the Directors were for business purposes of the company. No material was brought on record to show that the children were engaged in the business of the assessee-company or there was any agreement between the company and the children. In these circumstances, AO was justified in disallowing proportionate expenses of children relating to other expenses when the ticket expense of children was considered by the assessee itself as not relating to business and therefore, the CIT(A) was not justified in deleting the same. We, therefore, modify the order of the CIT(A) to the above extent and direct the Assessing Officer to disallow ₹ 1,50,000/- out of Foreign Travelling Expenses claimed by the assessee. - Decided partly in favour of assessee. Deduction claimed u/s 80I - CIT(A) directed AO to restrict the deduction claimed u/s 80I by excluding the amount of duty draw back received for computation of the deduction - Held that:- In the instant case, the Assessing Officer disallowed the claim made by the Assessing u/s 80I on the ground that the conditions specified in section 80I(i)(iv) were not fulfilled. The CIT(A) deleted the disallowance without recording any specific finding on the above issue. We, therefore, set aside the order of the CIT(A) on this issue and restore this issue back to the file of the CIT(A) for adjudicating the issue afresh by passing a speaking order on this issue after allowing both the parties reasonable opportunity of hearing. - Decided in favour of Revenue for statistical purposes.
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