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2017 (9) TMI 518 - AT - Income TaxComputational error in AO’s order - rectification - Held that:- Since the returned income reflected by the assessee was ₹ 3,84,06,321/- and the assessee suffered addition aggregating ₹ 50,60,177/- and therefore the determined income should has been ₹ 4,34,66,498/- whereas the same has been taken as ₹ 4,25,38,780/- by Ld. AO and therefore, require rectification. Addition against write-off of advances - Held that:- We are inclined to confirm the same since the assessee could not adduce any material to show that the advances were given in the ordinary course of assessee’s business and the same constitute trading loss for the assessee. Per query from the bench, the assessee could not produce any agreement / documentary evidences to substantiate this fact and therefore, this addition is confirmed and this ground of assessee’s appeal stands dismissed. Addition on account of bad debts written-off - Held that:- After perusal of ledger extract placed in the paper book, we concur with the stand of the Ld. DR that the same reveals no movement in the debtor’s balances since past many years and does not show fulfillment of condition prescribed u/s 36(2)(i). However, the Ld. AR has contended that the income from these debtors was offered to tax in earlier years and the assessee is in possession of necessary evidences to substantiate this fact and therefore, we deem it fit to restore the matter back to the file of Ld. AO to verify this fact and decide as per law after affording adequate opportunity to the assessee, who, in turn, is also directed to substantiate the same with evidences. Resultantly, this ground of assessee’s appeal stands allowed for statistical purposes. Adhoc addition of expenses was on the higher side - Held that:- Upon perusal of the cited Tribunal order, we find that the bench has taken a view that disallowance to the extent of 5% would suffice to meet the end of justice. Therefore, taking the same stand, we restrict the adhoc disallowance to 5% of ₹ 1,04,93,675/- which comes to ₹ 5,24,684/-. Resultantly, the assessee’s ground of appeal stands partly allowed. Disallowance u/s 14A - Held that:- The assessee simply asserted that no expenses were incurred to earn the exempt income without substantiating the same. Therefore, the addition, thereof @0.5% of average investments, in terms of Rule 8D(2)(iii), requires no interference on our part. Resultantly, this ground of assessee’s appeal stands dismissed.
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