9911796707
TMI Blog2017 (2) TMI 785X X X X Extracts X X X X X X X X Extracts X X X X ..... ehyde, formaldehyde, hexamie, industrial alcohol, acetic acid, power CPW etc., The assessee for the year under consideration has filed its return of income dated 30.09.208 declaring total income of Rs. 18,36,02,250/-. Thereafter case was selected under scrutiny and accordingly notice u/s 143(2) / 142(1) were issued upon the assessee. The assessment was completed u/s 143(3) of the Act at a total income of Rs. 18,64,20,660/- under the Income Tax Act. 3. First issue raised by assessee in this appeal is that learned CIT(A) erred in disallowing the amount of bad debts written off in the year under consideration under the normal provisions of Income Tax Act for Rs. 49,21,899.00. 4. At the outset we find that the AO has disallowed the provisions for bad & doubtful debts for Rs. 49,21,899.00 while working out the book profit for the computation of Tax under the provisions of section 115JB of the Act. The ld. CIT(A) has confirmed the same in terms of clause (i) to explanation 1 of section 115 JB of the Act which was brought to tax by the Finance Act 2009. From the perusal of the records we find that the AO has never disallowed the provision for bad and doubtful debts under the normal prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly, assessee's appeal on ground no. 3 is dismissed." Aggrieved by this, assessee has come up an appeal before us. 8. Before us Ld. AR for the assessee filed paper book which is running pages from 1 to 133 and reiterated same submissions as made before Ld. CIT(A). He prayed that the issue may be decided on merit. On the other hand, Ld. DR vehemently relied on the order of Authorities Below. 9. We have heard the rival contentions of both the parties and perused the materials available on record. The issue in the instant case relates to the disallowance of expenses in terms of rule 8D(ii) and (iii) of Income Tax Rules 1962 by the AO which was subsequently confirmed by the ld. CIT(A). From the perusal of the records, admittedly, the investment was made by the assessee in the earlier years but the learned AR has not brought anything on record before us whether the investment in the earlier years was made out of the own funds of the assessee. In our considered view it is the duty of the assessee to justify on the basis of evidences that the investment was made out of own funds. In this connection we rely in the judgment of Hon'ble Calcutta High Court in the case of Dhunaka & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) to section 115JB of the Act. We do not think that there is any prohibition to adopt the disallowance made by the AO u/s.14A of the Act read with Rule 8D of the rules, while computing total income under the normal provisions of the Act. The argument of the learned counsel for the Assessee that section 14A of the Act is very specific and is applicable only for the purpose of computing total income under Chapter IV of the Act and that section 115JB appears in Chapter XIIB of the Act dealing with specific provisions relating to certain companies and therefore the provisions of Sec.14A read with Rule 8D of the Rules cannot be applied while making addition to net profit as per profit and loss account u/s.115JB Expln.1 clause (f) of the Act, because the expression "expenditure relatable" is used in sub-clause (f) of Explanation (1) to section 115JB of the Act whereas expression with the expression used in 14A of the Act is "expenditure incurred by the assessee in relation to" and therefore only direct expenditure attributable to earning of income which does not form part of the total income under the Act can be added under clause(f) of Expln.1 below Sec.115JB(2) of the Act, cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee in this appeal is that Ld. CIT(A) erred in confirming the addition of Rs. 49,21,899/- on account of bad debt which were actually written off in the books of account while working out the book profit u/s. 115JB of the Act. 13. At the outset we find that the learned AR has not brought anything on record to demonstrate that the provisions for the bad and doubtful debts have actually been written off in the books of accounts and in the ledgers of respective parties. As per the provisions of section 115 JB of the Act the amount of book profit will not be increased by the amount of bad debts actually written off in the books of accounts. Accordingly we in the interest of justice & fair play we are inclined to restore this issue to the file of learned CIT(A) for fresh adjudication as per law with the direction to the assessee to produce necessary documents to justify that the amount of bad and doubtful debts has actually been written off in the books of accounts of the assessee. Hence this ground of appeal of assessee is allowed for statistical purposes. 14. Fifth issue in this appeal of assessee is that Ld. CIT(A) erred in confirming the addition of Rs. 14,34,965/- while computi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
