Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (10) TMI 292 - ITAT HYDERABADBad debts written off disallowed Amount covered by State Government Guarantee Held that:- The claim of the assessee for deduction on account of bad debts written off was disallowed by the AO mainly on the ground that the relevant debts written off by the assessee had not actually become bad during the year relying upon TRF Limited V/s. CIT [2010 (2) TMI 211 - SUPREME COURT] - every assessee, prior to 1.4.1989 had to establish that the debt advanced by him, had in fact become irrecoverable in order to claim deduction u/s 36(1)(vii) - this position has got altered by the amendment made in S.36(1)(vii) of the Act with effect from 1.4.1989 and it is not necessary for the assessee after 1.4.1989 to establish that the debt in fact has become irrecoverable - if the bad debt is written off as irrecoverable in the accounts of the assessee, it is enough for the assessee to claim deduction on account of bad debts u/s 36(1(vii) - the relevant debts were written off by the assessee in the books of account and since the same represented the money lent in the ordinary course of business of banking carried on by the assessee, the assessee is entitled to claim deduction on account of bad debts written off u/s 36(1)(vii) r.w. section 36(2) the order of the CIT(A) is set aside Decided in favour of assessee. Amount paid to LIC towards Employees Gratuity Fund disallowed Held that:- The amount paid by the assessee to LIC towards Employees Gratuity Fund was disallowed by the AP on the ground that the Fund was not approved by the prescribed authority under the Income tax Act, although application seeking such approval was filed by the assessee assessee contended that the Employees Group Gratuity Fund has since been approved by the Commissioner of Income-tax II, Hyderabad with effect from 1.3.2009 vide letter dated 1.3.2013 - both the sides have agreed that the matter should be sent back to the AO thus, the matter is remitted back to the AO for fresh adjudication Decided in favour of assessee. Bad debts written off under the Agricultural Debt Waiver and Debt Relief Scheme, 2008 Held that:- As per clause (v) of sub-section (2) of S.36, no deduction for a bad debt or part thereof can be allowed, where such debt or part thereof relates to advances made by an assessee to which clause (viia) of sub-section (1) applies, unless the assessee has debited such debt or part of the debt in that previous year to the provision for bad and doubtful debts account made under that clause assessee contended that the provisions of S.36(1)(viia) introduced in the statute book with effect from 1.4.1979 are made applicable to cooperative banks only from 1.4.2007, and therefore, the CIT(A) ought to have directed the AO to satisfy himself about the fulfilment of the conditions stipulated in S.36(2)(v) by the assessee keeping in view that S.36(1)(viia) was applicable in the case of the assessee only with effect from 1.4.2007 - this contention raised by the assessee is duly supported by the Board Circular No.258/1979 dated 14.6.1979 and No.3 of 2008 dated 12.3.2008, clarifying that the provisions of S.36(1)(viia) introduced from 1979 would not be applicable to cooperative banks from 1.4.1979, but only from 1.4.2007 thus, the direction given by the CIT(A) is modified to the extent that the AO shall satisfy himself about the fulfillment of the condition stipulated in S.36(2)(v) by the assessee, keeping in view that S.36(1)(viia) is applicable in the case of the assessee only with effect from 1.4.2007 while considering the claim of the assessee for deduction on account of bad debts under the Agricultural Debt Waiver and Debt Relief Scheme, 2008 Decided partly in favour of assessee. Computation of business income Investment depreciation and profit on sale of investments to be included or not Held that:- CIT(A) has directed the AO to consider the claim of the assessee for relief on the issues after verifying the same from the relevant records as decided in assessees own case for the similar issue was restored by the Tribunal also to the file of the Assessing Officer in assessees own case The Andhra Pradesh State Co-operative Bank Ltd. Versus The Asst. CIT, Circle-2(3), Hyderabad [2014 (1) TMI 295 - ITAT HYDERABAD] the matter is to be remitted back to the AO for fresh adjudication Decided in favour of assessee.
|