Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2021 (2) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (2) TMI 188 - HC - Income TaxDisallowance u/s 14A r.w.r. 8D - whether the disallowance under Section 14A of the Act can be made while computing book profit of a Company under Section 115JB? - HELD THAT:- The first two questions, as proposed by the Revenue, are no longer res integra in view of the decision in the case of Deputy Commissioner of Income Tax vs. Vasco Sales & Marketing Corporation [2015 (10) TMI 1088 - KERALA HIGH COURT] - This judgement refers to and rely upon the Supreme Court decision in the case of S.A. Builder Ltd. vs. Commissioner of Income Tax (A), Chandigarh [2006 (12) TMI 82 - SUPREME COURT]. In view of the settled position of law, the disallowance under Section 14A would not be permissible. We do not find that the Tribunal has committed any error. Disallowance of bad debt claim - stand of the assessee was rejected by Revenue authorities on the ground that since it has advanced fresh loans during the year, therefore, it cannot be said that recovery of interest has become bad - according to the ld. CIT(A) taxes in actuality were not paid by the QFL on cessation of this liability - HELD THAT:- We are in agreement with the view taken by the Tribunal that The moment debts have been written off in the books, it is to be allowed without expecting the assessee to demonstrate whether debts have actually become bad or not. A reliance can be made to the decision of TRF Ltd. [2010 (2) TMI 211 - SUPREME COURT]. It is altogether irrelevant, whether QFL actually paid tax or not. If a liability has ceased, then it will be added back in the taxable income of the QFL. Now, if that concern was suffering huge loss, then that cannot be the reason to disallow claim of the assessee. If this type of logic is being accepted, then every business organization was required to show profit only. This is a misplaced notion at the end of the ld. CIT(A) for rejecting the claim of the assessee. We allow this ground of appeal, and delete disallowance of bad debts. None of the three questions as proposed could be termed as the substantial questions of law for the purpose of Section 260A of the Act, 1961.
|