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2020 (9) TMI 814 - AT - Income TaxDisallowance of claim of interest payable on sales tax, excise duty and customs duty - HELD THAT:- We notice that an identical issue has been considered by the coordinate bench in the assessee’s own case [2017 (12) TMI 570 - ITAT BANGALORE]and it was decided against the assessee. Disallowance of interest payable to micro, small and medium enterprises by invoking section 23 of MSMED Act - A.R submitted that the Income tax Act does not provide for any such disallowance - HELD THAT:- We notice that an identical issue has been considered by the coordinate bench in the assessee’s own case and it was decided against the assessee in assessment year 2008-09 [2017 (12) TMI 570 - ITAT BANGALORE] Weighted deduction made by the assessee u/s 35(2AB) - assessee had claimed weighted deduction on the gross amount of expenditure incurred by it on R & D activities - As per AO reduction is allowable on the net amount of expenditure, i.e., expenditure as reduced by related income - HELD THAT:- Following the order passed by the coordinate bench in 2008-09, we set aside the order passed by Ld CIT(A) on this issue and direct the A.O. to allow the deduction u/s 35(2AB) of the Act on the gross amount of expenditure. Disallowance u/s 14A - Interest disallowance made under rule 8D(2)(ii) of the I.T. Rules - HELD THAT:- Admittedly, the own funds available with the assessee is more than the value of investments as at the beginning and end of the financial year. Accordingly, the presumption is that the assessee has used his own funds for making the investments, in which case no disallowance out of interest expenditure as per rule 8D(2)(ii) of the I.T. Rules is called for. In this regard, we derive support from the decision rendered in the case of Reliance Industries Ltd. [2019 (1) TMI 757 - SUPREME COURT]. Accordingly, we direct the A.O. to delete the interest disallowance made under rule 8D(2)(ii) of the I.T. Rules. Disallowance made out of administrative expenses, under rule 8D(2)(iii) - Since the factual aspects relating to this issue require examination, we restore the issue of making disallowance under rule 8D(2)(iii) of the I.T. Rules to the file of the A.O. by following the principle laid down in the case of Vireet Investments P Ltd [2017 (6) TMI 1124 - ITAT DELHI] - However, if the disallowance worked out by the A.O. turns out to be lower than the amount of disallowance made by the assessee in the return of income, then the disallowance made by the assessee should be restored. Disallowance of provision for bad and doubtful debt u/s 36(1)(vii) - HELD THAT:- We notice that the Hon’ble Karnataka High Court has considered an identical issue in the case of Sandvik Asia Limited 2013 (2) TMI 900 - KARNATAKA HIGH COURT and it has been decided in favour of the assessee by following the decision rendered by Hon’ble Supreme Court in the case of Vijaya Bank 2010 (4) TMI 46 - SUPREME COURT As noticed earlier that the assessee has reduced the amount of provision for doubtful debts from the amount of sundry debtors in the balance sheet. Accordingly, respectfully following the decision rendered by Hon’ble Karnataka High Court, we direct the A.O. to delete the impugned disallowance.
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