Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (9) TMI 1022 - AT - Income TaxCessation of liability - contention of CIT(A) is that the assessee has not furnished any evidence to show that the amount was not transferred from appropriation account nor explained whether the appropriation account is created - HELD THAT:- The evidence regarding the appropriation account and the Resolution of Board of Directors were not before the AO and CIT(A) - we find force in the arguments of the ld. AR and in view of the same, we deem it proper to remand the matter to the file of AO for its fresh verification. The assessee is liberty to file all evidences, if any, in support of its claim. AO shall afford reasonable opportunity of hearing to the assessee and pass order, in accordance with law. Demand drafts not paid more than three years - We note that from the record that pay orders and demand drafts were not claimed by the parties within relevant time as explained by the AO and in our opinion, it becomes the income of the assessee. There is no evidence to show that the amounts were paid or adjusted by the assessee which clearly shows the assessee recognized the said amounts as income of the assessee. Therefore, since, the said amount has been accepted by the assessee as income in its accounts again remanding the issue to the AO does not arise at all. We find no infirmity in the order of CIT(A). Accordingly, it is justified. Cessation of liability on account of Gratuity - AR requested to remand this matter to the file of AO for its fresh adjudication. The ld. DR did not report any objection for remanding this issue to the file of AO. Accordingly, we direct the AO to examine the issue in detail and the assessee is liberty to file evidences, if any in support of its claim. Thus, ground Nos. 1 and 4 raised by the assessee are allowed for statistical purpose. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- It should be presumed that the investments were made from interest free funds i.e. capital funds held by the assessee. Thus, the interest expenditure as computed by the AO under Rule 8D(2)(ii) to an extent of ₹ 17,90,540/- is not permissible. Thereupon, the only disallowance remains for our consideration is the disallowance made under Rule 8D(2)(iii) to an extent of ₹ 2,25,000/-, in our opinion, is justified. Accordingly, we confirm the addition to that effect made under Rule 8D(2)(iii) of Rules and the order of CIT(A) is set aside. Thus, ground No. 2 raised by the assessee is partly allowed. Addition u/s 36(1)(vii)(a) - AO and CIT(A) held when there was no provision made for bad and doubtful debts in the account of assessee the claim made therein is not allowable - HELD THAT:- There is no dispute with regard to provision made under standard assets, to claim a deduction u/s. 36(1)(vii a) of the Act requires creation of provision as a mandatory pre-condition for claiming deduction under statute. Therefore, when the assessee has not claimed separate deduction on standard assets, in our opinion, the assessee is entitled to claim deduction u/s. 36(1)(vii a) of the Act to the extent as the provision made under standard assets. Thus, the AO is directed to give deduction to the extent of ₹ 10 lakhs as against the deduction claimed ₹ 42,26,631/-. Ground raised by the assessee is allowed for statistical purpose.
|