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2020 (5) TMI 177 - AT - Income TaxBad debits - Disallowance of eligible deduction u/s 36(1)(viii) - long term loans given to individuals on the ground that they do not constitute loans for development of housing in India - HELD THAT:- In view of own case [2019 (3) TMI 1261 - ITAT COCHIN] we do not find any infirmity in the order of the CIT(A) in granting relief to the assessee u/s. 36(1)(viii) with regard to providing long term finance for industrial or agricultural development or development of infrastructure facility in India and the same is confirmed. Thus, this ground of appeals of both the assessee as well as the Revenue are dismissed. Doubtful debts - Deduction u/s 36(1)(viia) in respect of rural branches based on population of ward - confirming the order of the A.O. allowing the same based on population of village - HELD THAT:- We find that similar issue came up for consideration before the Hon’ble jurisdictional High Court in the case of CIT v. Lord Krishna Bank Limited [2010 (10) TMI 860 - KERALA HIGH COURT] assessee's case that found acceptance with the Tribunal is that "place" referred to in the above definition clause is the ward of a panchayat or municipality, the AO took the view that "place" contained in the definition clause should mean a revenue village. No doubt, "place" as such is not defined in the definition clauses and so much so, we have to find out the scope and meaning of "place" referred to in the section. Standing counsel for the Department produced before us last published Census Report of 2001. Even though the previous Census Report may be the relevant one, we feel the scope of "place" as referred to in the Census Report produced could be adopted for the purpose of this case - we are inclined to reject the above ground of appeal raised by the assessee. Allowability of claims made during the course of assessment - HELD THAT:- Tribunal relied on the judgment of the Hon’ble Supreme Court in the case of Goetze (India) Ltd. v. CIT [2006 (3) TMI 75 - SUPREME COURT]and remanded the issue to the file of CIT(A) for fresh consideration. In view of the above decision of the Tribunal cited supra, we are inclined to remit all the above grounds to the CIT(A) to consider afresh and decide the same in accordance with law. Addition u/s 14A - HELD THAT:- As long as the exempt income was earned, the expenditure incurred as attributable to earning such exempt income had to be disallowed u/s 14A and also irrespective of the objective of investment in shares when the shares are held as stock-in-trade with a view to earn trading profits or as investment representing controlling interest and in the course if the assessee earned any exempt income, section 14A was applicable and expenses to be disallowed in respect of exempt income by apportioning the total expenditure incurred by the assessee between taxable and non-taxable income. However, the A.O. has to record the satisfaction before invoking all these provisions. Thus, it is wrong to say that in the case of Maxopp Investment Ltd. v. CIT [2018 (3) TMI 805 - SUPREME COURT] the principle of apportionment is not applicable. Hon’ble Supreme Court held that applying the principle of apportionment applicable in such cases and it has to be depend upon the facts of each years, the expenditure incurred to earn exempt income to be apportioned. We are of the opinion that there is decision in favour of the Revenue in assessee’s own case for the preceding assessment year, which has to be applied for the present assessment year also. Accordingly, this ground of appeal by the Revenue is allowed.
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