TMI Blog2012 (9) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... details are filed in respect of - when the supply was made to the above party and how much amount was due from it, why shares pledged by SMT were not invoked in event of non-payment. Hence, CIT(A) was justified in holding that assessee has failed to discharge the onus that the said rebate was due to business expediency - Decided against assessee Dis-allowance u/s 43B of Rs 8.71 crores - interest to financial institution - assessee contending mistake in clubbing and contending dis-allowance of Rs 6.11 crores - Held that:- During course of hearing, assessee was unable to file any document to substantiate that interest due to financial institution was Rs.6.11 crores. dis-aloowance confirmed - Decided against assessee Dis-allowance u/s 14A - computed in accordance with Rule 8D - AY 05-06 - Held that:- CIT(A) was not justified in computing dis-allowance by applying Rule 8D as the said Rule is not applicable to the AY 2005-06. See Godrej & Boyce (2010 (8) TMI 77 - BOMBAY HIGH COURT). Matter restored to file of AO - I.T.A. No. 6495 to 6497/Mum/2010 - - - Dated:- 13-6-2012 - SHRI B.R. MITTAL AND SHRI N.K. BILLAIYA JJ. Appellant by Dr. K. Shivaram. Respondent by Mrs. Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te off that there was no ray of hope on which it could rely for recovering the amount from the debtor. The AO has stated that mere writing off these debts as bad debts is premature and accordingly he disallowed the claim of the assessee and added back to the total income of the assessee. It is relevant to state that the AO has stated that the decision of ITAT, Mumbai Special Bench, in the case of DCIT vs. Oman International Bank (100 ITR 285) (SB), which is decided against the department, is not accepted by the department and appeal to the High Court has been filed by the department. Being aggrieved, the assessee filed first appeal before the appellate authority. 7. The assessee filed an application under rule 46A for submitting fresh evidences, inter alia, in respect of bad debts in the form of ledger copies, confirmations and also details of investment with a request to admit the same. The ld. CIT(A) has asked for comments of the AO. The AO, in his remand report dated 13-04-2010, stated that all such details should have been furnished during the assessment proceedings, though only some of them were produced. The ld. CIT(A), after considering the comments of the AO and explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. On the other hand, the ld. DR submitted that the assessee had not filed any details as to whether the conditions laid down u/s. 36(2) were fulfilled or not. Therefore, the assessee was not able to establish the genuineness of the debt which the assessee has claimed to be written off in the assessment year under consideration. She submitted that the assessee could not establish with any documentary evidence as to whether the said amount, which the assessee has claimed to be bad debt written off, had been offered for taxation in the preceding assessment year. In reply, the ld. AR submitted that the assessee filed additional evidences before the ld. CIT(A) in the form of ledger copies in respect of the bad debt claim but the ld. CIT(A) refused to accept the same. He further submitted that if the matter is restored to the AO, the assessee will furnish the requisite details before him. He further submitted that at the relevant time the assessee was a BIFR company and, therefore, the details could not be produced before the AO, and after the BIFR approved the scheme, the assessee company has been revived recently. 11. We have carefully considered the submissions of the ld. repres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee and disallowed the same. Being aggrieved, the assessee filed appeal before the first appellate authority. 15. During the course of hearing, it was submitted on behalf of the assessee before the ld. CIT(A) that the assessee granted rebates to the above party due to defect in goods which could not be replaced due to closure of business of the assessee as it had no other option but to grant the said rebates. It was contended that rebate was a business expediency and is allowable as business expenditure. 16. The ld. CIT(A) has stated that the reply of the assessee before him is too general to be accepted considering the enormity of the amount involved. He has stated that the assessee has to prove to the satisfaction that there was business urgency in respect of the party concerned with necessary evidences, past records, similar allowance to others, relationship of the assessee, basis for working out the quantum of rebate, etc. Since the onus u/s. 37 is entirely on the assessee, non-furnishing of such details does not prove the business expediency. Accordingly, the ld. CIT(A) confirmed the action of the AO. Hence, the assessee is in further appeal before the Tribunal. 17. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Shreeji S.M. T. Pvt. Ltd. had pledged shares to the assessee of I.A. I.C. Pvt. Ltd. and of Shah Pratap Industries Pvt. Ltd. and the shares pledged were invoked by the assessee against receivable and the amount shown respectively is of Rs.11,12,75,000/- and Rs.60,00,000/-. The ld. AR was confronted with respect to the said details but he could not offer any explanation as to when the shares were pledged by M/s. Shreeji S.M. T. Pvt. Ltd. and why the said shares pledged with the assessee were not invoked when the said party failed to make payment to the assessee instead of giving the rebate of Rs.1,36,86,720/-. The ld. AR also could not place on record any other correspondence that the said rebate was given by the assessee due to commercial expediency of the business of the assessee. Therefore, we agree with the ld. CIT(A) that the assessee has failed to discharge the onus that the said rebate was due to business expediency of the assessee. Hence, we do not find any reason to interfere with the order of the ld. CIT(A). Therefore, we uphold the order of ld. CIT(A) and reject ground no.III taken by the assessee. 20. Now, we take up the appeal filed by the assessee for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fere with the orders of the authorities below. Hence, ground nos.1 2 of Part I of the appeal of the assessee are rejected. 25. In ground nos.3 to 5 of Part II of the appeal, the assessee has disputed the order of ld. CIT(A) in confirming the disallowance of bad debt of Rs.23,99,64,072/-. 26. The ld. representatives of both the parties conceded that the facts and the reasons for disallowance are similar to the assessment year 2004-05 which we have discussed in paragraphs 6 to 11 hereinabove and requested that the matter could be restored to the AO for his fresh consideration after giving due opportunity of being heard to the assessee and after considering such evidences as may be filed before him. We, for the reasons mentioned hereinabove in paragraph 11, restore ground nos. 3 to 5 of Part II to the file of AO with a direction to re-decide the issue of bad debt as per law after giving due opportunity to the assessee and after considering such evidences as may be placed before him. Hence, ground nos. 3 to 5 of Part II of the appeal are allowed for statistical purposes. 27. In ground nos.6 7 of Part III of the appeal, the assessee has disputed the order of ld. CIT(A) to rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35. Similar issue came up for our consideration for the assessment year 2004-05 in ITA No.6496/Mum/2010 hereinabove vide paragraphs 6 to 11. Following our finding in paragraph 11 hereinabove, we restore this issue to the file of AO with a direction that he will decide the same afresh after considering such evidences as may be filed by the assessee before him and after giving due opportunity of being heard to the assessee as per law. Therefore, ground nos.1 to 3 of Part I taken by the assessee are allowed for statistical purposes. 36. In Part II of the grounds of appeal, the assessee has disputed the order of ld. CIT(A) in upholding the disallowance of Rs.10,48,482/- made by the AO for the exempt income by applying Rule 8D read with sec. 14A of the I.T. Act. 37. The ld. AR submitted that the AO made disallowance of Rs.10,48,482/- by applying Rule 8D for making disallowance u/s.14A of the Act and the ld. CIT(A) has confirmed the action of the AO. The ld. AR referred to the decision of the Hon ble jurisdictional High Court in the case of Godrej Boyce Mfg. Ltd. vs. DCIT (supra) and submitted that Rule 8D is applicable from assessment year 2008-09 onwards and not to the earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X
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