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2016 (5) TMI 815 - AT - Income TaxDisallowance u/s 14A - Held that:- For the purpose of disallowance of other expenses, we do not find any satisfaction recorded by the Assessing Officer in his order explicitly or implicitly to the fact that the claim of the assessee that no expenses have been incurred for earning exempt income is wrong. Reliance on the judgment of Punjab & Haryana High Court in the case of CIT Vs. Deepak Mittal (2013 (9) TMI 764 - PUNJAB & HARYANA HIGH COURT ), whereby it has been held that in the absence of any satisfaction recorded by the Assessing Officer, no disallowance of administrative expenses under section 14A can be made. As regards the act of the learned CIT (Appeals) in upholding the disallowance to the extent of ₹ 10 lacs, we do not find any substance in such an act on the part of the learned CIT (Appeals) since we are in agreement with the submissions of the learned D.R. that to the extent that if any disallowance has to be made under section 14A of the Act, the same has to be calculated as per Rule 8D w.e.f. assessment year 2008-09. However,, as per the facts of the present case, we have already held that there is no occasion to make disallowance under section 14A of the Act - Decided in favour of assessee Disallowance of bad debt/business loss being the amount forfeited by BHEL on account of termination of contract - Held that:- The enduring benefit derived at by the assessee at the time of foregoing the buying agreement. In our opinion, no such benefit of enduring nature has been derived by assessee at the time of suffering losses on account of forfeiture of advance money. The decision of course, was taken by the assessee in a way only to relieve itself from the huge amount of money to be paid for a machinery of lesser capacity in comparison to a machinery of higher capacity available to it at a lower cost. The assessee probably came to terms with the occasion of suffering such losses in wake of the fact of saving itself from incurring further huge losses. This act goes further to prove that the losses are incurred on a decision of prudence taken for the business. Since no capital asset came into existence, the loss is allowable as a business loss.- Decided in favour of assessee
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