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2015 (10) TMI 11 - AT - Income TaxValidity of re-opening of assessment u/s. 147 - addition made u/sec 2 (22)(e) - Held that:- None of the case law cited by the assessee fits to the facts and circumstances of the case in hand. In this case the additions made as deemed dividend u/s 2(22)(e) of the Act have already been confirmed by the CIT(A) in relation to base year AY 2001-02. On the date of reopening of the assessment for the year under consideration, the AO had reasonable belief that the income of the assessee for the year under consideration had escaped assessment. Hence we do not find any merit in Ground No.1 in relation to the validity of the reopening of the assessment. - Decided against assessee. Additions in relation to provision for bad debts - Held that:- The Hon'ble Supreme Court in the case of 'T.R.F. Ltd.' [2010 (2) TMI 211 - SUPREME COURT] has held that in order to obtain a deduction in relation to bad debts, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable; it is enough if the bad debt is written off as irrevocable in the accounts of the assessee. In view of above observations, this issue is restored to the file of the AO to examine it a fresh and decide the same in the light of the decision of the Hon'ble Supreme Court (supra). - Decided in favour of assessee for statistical purposes. Addition u/s 14A made on account of disallowance of expenditure incurred in relation to earning of the exempt income - Held that:- Jurisdictional High Court in the case of "Godrej & Boyce manufacturing Co. Ltd. vs. DCIT" [2010 (8) TMI 77 - BOMBAY HIGH COURT] wherein, it has been held that the AO has to look into the working of the assessee at the time of making disallowance u/s 14A. The Hon'ble Bombay High Court in the case of "Reliance Utilities and Power Ltd." [2009 (1) TMI 4 - HIGH COURT BOMBAY ] has observed that if there are funds available with the assessee, both interest free and overdraft/loans taken, then presumption would arise that investments would be out of the interest free funds generated or available with the assessee. A similar view was taken by the Hon'ble Bombay High Court in the case of "HDFC Bank Ltd." [2014 (8) TMI 119 - BOMBAY HIGH COURT]. We find that the above contentions of the assessee have not been examined by the AO. Further, he is not having the benefit of going through the decisions of the Hon'ble Jurisdictional High Court on the issue at the time of making the assessment. We accordingly restore this issue also to the file of the AO with direction to examine the contentions of the assessee in the light of the above decisions of the Hon'ble Jurisidictional High Court and decide the issue a fresh.- Decided in favour of assessee for statistical purposes.
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