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2023 (3) TMI 1113 - HC - Income TaxProvision for bad and doubtful debts - Interpreting section 36(1)(viia)(a) - NPA - scope of the expression “at its option” - Whether deduction under the first proviso to Section 36(1)(viia)(a) was alternative to that under sub-clause (a) and that no deduction under the first proviso was allowable if the deduction had been allowed under sub-clause (a)? - HELD THAT:- The proviso carves out an exception from the stipulation in sub-clause(c), otherwise the use of the expression “at its option” would lose its significance. The said decision would squarely apply to the case on hand and the only distinction being sub-clause(a) of Section 36(1)(viia)(a) would stand attracted in the case on hand and the said provision was given effect to from the assessment year 2000-01. The decision in the case of Tamilnadu Industrial Investment Corporation Limited was challenged by the revenue before the Hon’ble Supreme Court and the Special Leave Petition was dismissed as reported [2019 (7) TMI 408 - SC ORDER] Decided in favour of assessee. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- As relying on Dhansar Engineering Co. (P) Ltd. case [2021 (12) TMI 824 - CALCUTTA HIGH COURT] the procedure under Rule 8D of the Income Tax Rules, 1962 was held to be prospective in operation and not retrospective. Thus, the substantial questions of law nos.2 and 3 are answered in favour of the appellant/assessee and the AO is directed to do the recomputation bearing in mind the above legal principle.
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