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2015 (2) TMI 1033 - AT - Income TaxWrite off of bad debts in respect of export sales disallowed - CIT(A) giving relief of ₹ 24,57,522/- on account of bad debts - Held that:- Disallowance of bad debts is to be allowed in the present year because it is not in dispute that debits were written off in the present year. Regarding the objection of the Assessing Officer that these bad debts are in respect of export sales, we are of the considered opinion that in consequence to the claim of the assessee regarding write off of bad debts in respect of export sales, it has to be seen as to whether such sale was considered for the purpose of allowing deduction u/s 80HHC in the year of sale. Normally export sales are reduced by the amount of sale, which was not realized within the prescribed period. Still we feel that in the interest of justice, the Assessing Officer should look into this aspect and examine the details of the year of sale for which debts were created and now written off. The assessee should furnish these details before the Assessing Officer and Assessing Officer should thereafter allow deduction to the assessee in the present year in respect of write off of bad debts but consequently, he should examine the assessment of the concerned year in which the sale took place and for that year, the assessee should establish that these unrealized sales were not included in the export sales for the purpose of computing deduction u/s 80HH- Decided in favour of revenue for statistical purposes. Disallowance u/s 14A - CIT(A) deleted the addition - Held that:- Disallowance of interest expenditure of ₹ 7,57,380/- does not survive and in respect of disallowance out of administrative expenses, we feel that the disallowance was worked out by the Assessing Officer under Rule 8D to the extent of 0.5% of the average investments. As per the judgment of Hon'ble Bombay High Court rendered in the case of Godrej & Boyce Mfg. Co. Ltd. (2010 (8) TMI 77 - BOMBAY HIGH COURT), reasonable disallowance can be made before insertion of Rule 8D and in our considered opinion, disallowance of ₹ 50,000/- is reasonable in the facts of the present case. We, therefore, uphold the disallowance u/s 14A to the extent of ₹ 50,000/- and balance disallowance is deleted. - Decided partly in favour of revenue. Non serving of notice u/s 143(2)on the assessee within the prescribed time - Held that:- We find that prior to 01/04/2008, the time available for serving notice u/s 143(2) was 12 months from the end of the month in which return is furnished. In the present case, return was filed on 31/10/2005 and therefore, time was available upto 30th September, 2006 for serving notice u/s 143(2). As per the assessment order, such notice u/s 143(2) was issued on 13/09/2006 and the same was duly served on the assessee. - Decided against assessee. Disallowance of vehicle running expenses - Held that:- As relying on Sayaji Iron and Engg. Co. vs. CIT [2001 (7) TMI 70 - GUJARAT High Court] no disallowance is called for in the case of a company on the basis that there was personal user of vehicles. Even if there is personal use of vehicles by the Directors of the company then the value thereof can be added in the perquisites of the concerned director but no disallowance can be made in the hands of the company. - Decided in favour of assessee. Exclusion of "Duty Draw Back" from the computation of eligible profit for the purposes of relief under section 80IB - Held that:- This issue is now squarely covered against the assessee by the judgment of Hon'ble Apex Court rendered in the case of Liberty India vs. CIT [2009 (8) TMI 63 - SUPREME COURT ] wherein held Duty drawback receipt/DEPB benefits do not form part of the net profits of eligible industrial undertaking for the purposes of Sections 80I/80-IA/80-IB of the 1961 Act - Decided against assessee. Short deduction allowed by the Assessing Officer u/s 80G - Held that:- As per the assessment order, we find that it is noted by the Assessing Officer that regarding the claim of ₹ 15 lac related to Shyam Behari Mishra Memorial Charitable Trust, no details have been filed by the assessee and therefore, the Assessing Officer has not allowed the claim of the assessee for deduction u/s 80G in respect of this amount of ₹ 15 lac. Neither before CIT(A) nor before us, any detail has been furnished by the assessee and therefore, on this issue, we do not find any merit in the grounds raised by the assessee - Decided against assessee.
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