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2019 (1) TMI 412 - HC - Income TaxProvision for bad and doubtful debts - Held that:- Section 36(1)(vii) read with the proviso and Explanation would enable the assessee only to deduct amounts written off in excess of the deduction allowed as provision for bad and doubtful debts under Section 36(1)(viia). We see from the assessment order that the assessee had, as in the earlier year also claimed write off of ₹ 3,50,41,439/- in the A.Y. 1996-97 and ₹ 5,60,87,000/- in the A.Y. 1997-98 relying on Vithaldas H.Dhanjibhai Bardanwala v. C.I.T., [1980 (8) TMI 40 - GUJARAT HIGH COURT] as relied on by the assessee is no longer good law in view of the decision in Southern Technologies Ltd. v. Joint C.I.T., [2010 (1) TMI 5 - SUPREME COURT OF INDIA]. The very same Section 36(1)(vii) and (viia) came up for consideration before the Hon'ble Supreme Court. The Hon'ble Supreme Court noticed the Explanation brought in by THE Finance Act, 2001 with retrospective effect from 01.04.1989 and overruled the said decision. We, hence, answer that question of law in favour of the Revenue and against the assessee for the respective years. Cost of compliments supplied to the share holders who attended the annual general body meeting of the appellant company - expenditure incurred wholly and exclusively for the purpose of the business - Held that:- Compliments given to the shareholders in the Annual General Meeting is to ensure participation of the members in the AGM. This brings in more transparency and ensures democratic decision making. In such circumstances, it was held to be a business expenditure. Write off claimed of a bad investment - Held that:- the assessee bank in the subject assessment year was holding it as investment and by a resolution of the Board of Directors on 17.05.1999 the character of the investment was converted into stock-in-trade. The conversion was made in the financial year 1999-2000, which is the relevant previous year to the next assessment year ie: 2000-2001. The Tribunal also noticed that in the subsequent year the issue was remanded back for consideration to the Assessing Officer. However, in the subject assessment year, the assessee had been holding the portfolios as investments, there is no question of claiming write off of the loss said to have been occasioned. Disallowance in the light of the rule introduced for the purpose of section 14A - Held that:- he Hon'ble Supreme Court in Commissioner of Income Tax v. Essar Teleholdings Ltd., [ 2018 (2) TMI 115 - SUPREME COURT OF INDIA] held that the provision would be applicable only from the assessment year 2007-08. Hence, the question is answered in favour of the assessee and against the Revenue.
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