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2017 (5) TMI 1040 - AT - Income TaxClaim of bad debts disallowed - Held that:- We fail to understand as to how the AO could state so when he has not made any findings on examining the books of accounts of the assessee. It is not the case of the Revenue that the assessee has not maintained books of accounts or produced the books of accounts before the Ld.A.O. All the books of accounts were very much available before the revenue. The ledger accounts maintained by the assessee will have the details of all the debtors. The debts that are considered bad are also written off in the books of accounts and the same is not disputed. Further by examining those books of accounts of the assessee it can be easily verified whether the brokerage charges was booked as income on the earlier occasion and whether the assessee has incurred loss on the sale of shares purchased by it on behalf of its clients against whom payment has become irrecoverable/partly irrecoverable. The opening balances of those debtors are also verifiable. Since the Revenue has not rejected the books of accounts and found out any discrepancies with respect to the claim of the assessee, the disallowance in the hands of the assessee is not warranted only on the pretext of the lame finding of the Revenue that the details with respect to the claim of deduction is not provided - Decided in favour of assessee. Addition u/s 14A read with Rule 8D - Held that:- The assessee has not convinced the Revenue authorities with respect to the expenses attributable for earning exempt income by apportioning all such expenses. Therefore the Revenue has no other option but to compute the disallowance in accordance with Rule 8D of the Rules. Moreover the Ld.AO has only invoked Rule 8D(iii) of the Rules and thereby computed the disallowance at ₹ 62,904/-, on which we are of the view that no interference is necessary in the order of the Revenue authorities. However at the same time we find that the Ld.AO has stated in his order that the disallowance U/s.14A is to be made for ₹ 2,23,019/- It appears there is a mistake in the order of the Ld.AO. Therefore we hereby correct the order of the Ld.AO by sustaining the addition at ₹ 62,904/- towards disallowance U/s.14A r.w.r 8D of the Rules.
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