Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (4) TMI 465 - AT - Income TaxAddition of debt written off - Held that:- The debt was taken into account in the income of the assessee for the AYs 2000-01 and 2001-02 when the interest income accruing thereon was taxed in the hands of the assessee. The nature of the income indicated the transactions from which it emerged. The transaction was the debt and the debt was taken into account in computing the income of the assessee of the relevant previous year. The principal amount which has been written off attracts clause (i) of sub-section (2) of section 36 of the Act and, therefore, the conditions specified in section 36(1)(vii) of the Act and requirement of clause (i) of sub-section (2) of sec. 36 of the Act have been fulfilled and, therefore, the Ld. CIT(A) has rightly deleted the addition and allowed the claim of the assessee. Disallowance under Rule 8D(2)(ii) - CIT(A) held that if net of interest received and interest paid is positive figure, no part of interest can be disallowed under rule 8D(2)(ii) as attributable to earning tax free dividend - Held that:- We note from the P&L Account of the assessee that the net interest reflected is an interest income of ₹ 58,23,756/-. Rule 8D(2)(ii) cannot be applied when there is no net interest expenditure upon setting up of interest credited to the P&L Account and, therefore, no part of interest debited can be disallowed as attributable to earning tax free dividend. The Ld. DR could not controvert this fact and, therefore, the AO erred in computing disallowance under Rule 8D(2)(ii) and, therefore, the Ld. CIT(A) has correctly allowed relief to the assessee and we do not find any infirmity in the order passed by the Ld. CIT(A) on this issue and, therefore, we uphold the impugned order of Ld. CIT(A) and dismiss this ground of appeal of revenue.
|