TMI Blog2015 (10) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... t. - 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 ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent : Shri Vijay Kumar Bora, DR ORDER Per Sanjay Garg, Judicial Member The present appeal has been preferred by the assessee against the order dated 18.03.2011 of the Commissioner of Income Tax (Appeals) [(hereinafter referred to as CIT(A)] relevant to assessment year 1998-99. 2. The assessee has taken the following grounds of appeal: 1. Re-opening of Assessment u/sec 147: 1.1 The Hon'ble C.I.T. (Appeals) -12, Mumbai, erred in not deciding the ground No.2 pertaining to re-opening of assessment u/s. 147 by the ld. ITO 6(3)(1) by forming an opinion based on the confirmation of addition made u/sec 2 (22)(e) by the Hon'ble C.I.T. (Appeals)-26 in the appeal for A/Y 2001-02. The reason for re-opening of assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact that the CBDT has restricted on re-opening of completed assessment on account of provision of Sec 14A vide Circular No.11 of 2001, dtd 23/07/2001 and hence no addition U/s 14A can be called for. 3.2 Without prejudice to the above, your appellant has voluntarily disallowed expenses of ₹ 13,99,528/- (interest expenditure ₹ 6,88,274/- + other expenses ₹ 7,11,254/-) incurred in relation to exempted dividend income which is quite a reasonable amount in relation to earning of Dividend Income, and hence, no further disallowances can be called for following the Hon'ble Bombay High Court decision in the case of Godrej Boyce Mfg. Co. Ltd. 328 ITR 81 3. The Ground No.1 of the appeal is relating to the validity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ground for reopening of assessment for the year under consideration was based on the additions made as deemed dividend u/s 2(22)(e) of the Act for A.Y. 2001-02. Since the said additions for A.Y. 2001-02have already been deleted by the Tribunal vide order dated 23.6.2008 and further for the year under consideration by the Ld. CIT(A) vide impugned order hence, the very reopening of the assessment has become invalid. He has relied upon the following decisions in this respect. 1. Connection Vs. ITO 355 ITR 465 (Guj) 2. Ultramarine Air Aids (P) Ltd. v/s. Inspecting ACIT 332 ITR 273 (Delhi) 3. P.G. Foils Ltd. vs. DCIT 353 ITR 548 (Guj). 5. We have considered the submissions of the Ld. AR and have also gone through the case la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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. This ground is accordingly dismissed. Ground No.2 6. The assessee through ground No.2 of the appeal has agitated the confirmation of the additions in relation to provision for bad debts. The Ld. AR, before us has contended that the same was not the provision but was the actual debt written off in the P L Account. Inadvertently it was mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents out of own/interest free funds whereas the interest bearing funds were used for business/manufacturing activity of the assessee. The Ld. AR has further relied upon the decision of the Jurisdictional High Court in the case of Godrej Boyce manufacturing Co. Ltd. vs. DCIT 328 ITR 81 (Bom.) 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. 9. It may be further noted that the Hon'ble Bombay High Court in the case of Reliance Utilities and Power Ltd. 313 ITR 340 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 fu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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