TMI Blog2020 (12) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... ,72,757/- because as per the balance sheet, investment income which are exempted as on 31.3.2014 was ₹ 41,89.019 and as on 31.3.2013 was of ₹ 41,89,019/-. We find that the ld.CIT(A) has examined the issue critically and re-worked out disallowance in accordance with the provisions contained in section 14A and the rule referred thereto Disallowance of claim of bad debt - HELD THAT:- This issue is squarely covered by the decision of TRF Ltd. [ 2010 (2) TMI 211 - SUPREME COURT ] and Reliance Petrochemical [ 2010 (3) TMI 80 - SUPREME COURT ] wherein it is held that as per the amended provision, condition precedent for claiming bad debts is that assessee has to write off amount of bad debts in its books of account - in order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as filed its return of income on 30.11.2014 declaring total income at ₹ 3,78,60,550/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued and served upon the assessee on 16.09.2015. During the scrutiny assessment, it was noticed by the AO that the assessee has earned dividend income to the tune of ₹ 9,79,373/- which was exempt from tax. The AO sought for information as to details of investments, from which the assessee has earned exempt income. Assessee furnished details of investment for the last two years and submitted that the assessee had made similar claim in the earlier year i.e. 2012-13 and the ITAT allowed such claim of the assessee. However, the ld.AO did not accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he nine parties were running and the assessee company had not produced any material on record to substantiate its claim that the said amounts of the debts have become bad and irrecoverable, the claim of the assessee was not justifiable, and therefore, he disallowed claim of the assessee and an amount of ₹ 1,73,37,301/- added to the total income of the assessee. 5. Aggrieved by the order of the ld.AO assessee went in appeal before the first appellate authority on both the issues. Before the ld.CIT(A) it was argued by the assessee that the assessee has got net surplus interest of ₹ 45,38,011/- and therefore if the assessee had net positive interest income, no disallowance of interest under section 14A/rwr 8D should be made. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. (ITA No.2228/Ahd/2012 dated 5.7.2013 and Nirma Credit Capital Ltd. Vs. CIT, 85 taxmann.com 72 (Guj), to the proposition that where net interest is positive, then no disallowance under section 14A is called for. He also relied upon the order of the ITAT, Ahmedabad Bench in the case of DCIT Vs. Adani Infrastructure Developers P. Ltd. in ITA No.1623/Ahd/2013 dated 6.9.2018. As regards disallowance of bad debts under section 36(1)(vii) is concerned, he submitted that position of law in this regard is settled so that after 1.4.1989 it is not necessary for the assessee to establish that the debt has in fact becomes irrecoverable. It is sufficient if the assessee has written off the debts in its books of accounts. 8. We have duly cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amended provision, condition precedent for claiming bad debts is that assessee has to write off amount of bad debts in its books of account. Therefore, in order to claim deduction under section 36(1)(vii) it is sufficient for the assessee to demonstrate that debt in fact has become irrecoverable and it has been written as such in the accounts of the assessee. The assessee in the present case has given a detailed note regarding the reasons for writing off the amounts in its books of accounts before the ld.CIT(A), and after considering totality of the facts and in view of above two judgments cited supra, the ld.CIT(A) held that the AO was not justified in denying the claim of the assessee. We do not find any reason to interfere in the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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