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2020 (1) TMI 121 - AT - Income TaxDisallowance u/s 14A - HELD THAT:- The CIT(Appeals) placing his reliance on the judgment of Madras High Court in Redington (India) Ltd. v. Addl. CIT [2017 (1) TMI 318 - MADRAS HIGH COURT] , has deleted the addition made by the Assessing Officer. This Tribunal is of the considered opinion that when the CIT(Appeals) has placed his reliance on the judgment of Madras High Court, which is binding on all the authorities in State, there is no error in the order of the CIT(Appeals). Even in respect of investments made in subsidiary company, there was no exempt income earned by the assessee. therefore, there is no question of any addition / disallowance with regard to expenditure. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. Disallowance of bad debt - grievance of the Revenue is that this amount was due from Ministry of External Affairs, therefore, it cannot be written off - HELD THAT:- Income-tax Act does not say that the amount due from Government cannot be written off. What is to be seen is whether the assessee has written off the amount as irrecoverable. It is not in dispute that the assessee has in fact written off the above said amount due from Ministry of External Affairs. Therefore, this Tribunal is of the considered opinion that the claim of the assessee has to be allowed. In case, it was recovered subsequently, the same has to be taken as income of the assessee in the year in which it was recovered, subject to the above observation. This Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. Leave encashment disallowed - AO as well as the CIT(Appeals) disallowed the provision for leave encashment on the basis of the judgment of Calcutta High Court in Exide Industries Ltd. v. Union of India [2007 (6) TMI 175 - CALCUTTA HIGH COURT] - HELD THAT:- Assessing Officer found that the stay was granted on 27.06.2007 by the Calcutta High Court and subsequent development was not available. The fact remains that the judgment of Calcutta High Court was stayed by the Apex Court and the appeal / SLP filed before the Apex Court is still pending. Therefore, for all practical purposes, it has to be construed that Section 43B(f) of the Act continued to be in the statute book. Since, admittedly, leave encashment was not paid by the assessee, the CIT(Appeals) has rightly confirmed the order of the Assessing Officer. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
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