TMI Blog2014 (7) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the relevant fund/s and not the employee’s contribution - The deduction qua the employee’s contribution stands squarely covered by section 36(1)(va) r/w.s. 2(24) – all the payments is to be made after 20th of the following month – the disallowance is confirmed – Decided against Assessee. Interest and expenses u/s 14A – investment in shares of companies and mutual fund units - Held that:- If a direct nexus between the investment and own funds cannot be shown by the assessee with reference to its accounts, the presumption would only be of the loans as financing proportionately all the assets, including assets yielding income not forming part of the total income - CIT(A) has given a clear and specific direction for applying the proport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise of any discretion. The claim was accordingly disallowed. In appeal, the assessee furnishing the relevant details, a remand report was called for (PB pgs.54-55). The ld. CIT(A) was, however, of the view that the additional evidence could not be accepted in-as-much as the terms of Rule 46A stood not satisfied, citing the decision in the case of Ram Prasad Sharma vs. CIT [1979] 119 ITR 867 (All) in support. True, the apex court per its decision in the case of TRF Ltd. vs. CIT [2010] 323 ITR 397(SC), had since clarified that it was not necessary for the assessee, to claim a debt as bad, establish it as having become actually so, and that a write off in accounts was sufficient for the purpose. However, a debt must at least prima facie be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir status. True, as clarified by the hon ble jurisdictional high court in Oman International Bank SAOG (supra), the write off must be genuine, and the A.O. could for good reasons hold it as not bona fide, disallowing the claim. This in fact represents trite law in-as-much as there is no question of a claim which is not genuine as being even considered for deduction under law, which is premised on it being a genuine claim. However, we are unable to fathom as to on what basis does the Revenue infers non-genuineness with regard to the claim qua 56 parties, aggregating to ₹ 24,95,027/-; the same having been explained as irrecoverable from retail customers (of lotteries) after adjusting their deposits. Apparent is real unless shown otherw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... qua the deductibility of claim for ₹ 2,08,842/- for the current year is restored back to the file of the A.O., to be decided in accordance with the law, issuing definite findings of fact after hearing the assessee. We decide accordingly. 4. The second ground is toward disallowance of the claim qua employee s contribution to the Provident Fund (PF). The same having been deposited, for eight (8) months of the relevant previous year, beyond the prescribed time, the same stood disallowed u/s.36(1)(va) r/w.s. 2(24)(x) of the Act. The same stood confirmed in appeal; the decision in CIT vs. Alom Extrusions Ltd. [2009] 319 ITR 306 (SC) being u/s.43B; the apex court having itself clarified that the deduction qua employer s contribution is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8/-) and expenditure (Rs.3,47,705/-), u/s.14A of the Act, made with reference to investment in shares of companies and mutual fund units. The disallowance stood effected by the A.O. at the impugned amount by applying Rule 8D; the assessee having earned dividend income at ₹ 2,70,982/- for the year, claimed exempt under Chapter III of the Act. In appeal, the ld. CIT(A) found that the investments had been made from a common pool of funds, so that the assessee could not exhibit the investment as having been sourced only from the interest-free funds. He, however, proposed a weighted average formula for apportioning the interest claim as well as estimating the expenditure at 0.5% of the average investment obtaining during the year. Aggri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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