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2019 (4) TMI 376

n this ground. Firstly because the disputed amount itself is not very substantial and secondly, though not so clearly stated, the view of the Tribunal can as well be understood and interpreted as one holding that the facts necessary for applicability of Rule 8D, did not arise in the present case. We may recall, sub-section (2) of Section 14A of the Act provides that the Assessing Officer would determine the amount of expenditure incurred in relation to income which does not form part of the total income if he is not satisfied with the correctness of the claim of the assessee in respect of such expenditure. If the expenditure already voluntarily disallowed by the assessee is found to be reasonable, the Assessing Officer in any case could not .....

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KOTWAL, JJ. Mr. Suresh Kumar for the Appellant P.C.: 1. This appeal is filed by the Revenue to challenge the judgment of the Income Tax Appellate Tribunal ( the Tribunal for short). 2. Following questions are presented for our consideration :- (a) Whether on the facts and in the circumstances of the case and in law, the Tribunal has erred in excluding some of the expenses holding as not directly related to earning dividend income which is in contravention to Rule 8D(2)(iii) of the I.T. Act, 1961? (b) Whether on the facts and in the circumstances of the case and in law, the Tribunal has erred in holding that the amount deducted by the AO is admissible u/S. 37(1) of the I.T. Act, 1961 as wholly and exclusively for the purpose of business? (c .....

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nal, thereafter had no discretion to restrict or reduce the disallowance. Once in terms of Section 14A of the Act, the disallowances voluntarily made by the assessee are to be discarded, Rule 8D of the Rules would apply. Sub-rule (2) of Rule 8D as it stood at the relevant time provided for a formula for such disallowances. Clause (iii) of Rule 8D(2) of the Rules pertains to disallowance of what is popularly referred to as administrative expenses. Though no such expression is used in the Rule which would be an amount equal to one-half percent of the average of the value of the investment. It would prima facie appear that once this rule applied and therefore, the said formula become applicable, the Tribunal thereafter could not have taken oth .....

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as wholly and exclusively for the purpose of business. We find no error in the view of the Tribunal. 7. Question No. (c) pertains to the assessee s claim of writing off the bad debts and claiming deduction under Section 36(1)(vi) of the Act. In this respect, the Tribunal noted that the assessee had purchased certain assets on slump sale basis. In the process, certain debts which were part of the current assets were reduced. The assessee wrote off sum of ₹ 1.76 Crores claiming same to be admissible under Section 36(1) of the Act. The Tribunal while reversing the view of the Assessing Officer and the CIT(A) in which it was held that in the process, the assessee was claiming double benefit, observed as under:- "...... We find that t .....

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n question was below ₹ 10 Lakhs which was a minimum monetary limit enabling the Revenue to prefer appeal against the Commissioner s Appellate orders before the Tribunal. Revenue argues before us that the Tribunal should have seen the monetary limit of the combined appeals of the assessee as well as the Revenue arising out of the common judgment of the CIT(A) pertaining to the assessee for the same assessment year. In our opinion, this question is not required to be examined in view of the fact that the decision of this Court in case of Kotal Securities Limited (supra) has been reversed by the Supreme Court in the case of CIT Vs. Kotak Securities Ltd [2016] 67 taxmann.com 356 (SC). Resultantly, on the merits also, the Revenue would hav .....

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