TMI Blog2024 (4) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is following mercantile system of accounting were the interest income would be considered on accrual basis - ITAT deleted addition - as per revenue Tribunal has erred in granting the benefit of Section 43D of the Act to the assessee - HELD THAT:- In absence of any doubt as to the status of the assessee as a State Financial Corporation and in face of the statutory scheme allowing it to account for recovery of interest on bad debts on cash basis, primarily, there is no error seen in the order of the Tribunal having allowed the benefit to the assessee to account for interest of bad debts on cash basis. The revenue has not brought on record any material fact as may raise a genuine doubt as to the entitlement of the assessee to account for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly, the present appeal has been filed. It was admitted on 18.01.2017. 4. Today, Shri Gaurav Mahajan has pressed Question nos. 1 and 2 framed in the memo of appeal. Those read as below : (1) Whether the ITAT erred in law regarding deletion of addition u/s. 14A without appreciating that substantive law u/s. 14A were already in existence and its provision 2 3 r/w Rule 8D are clarificatory in nature introduced to clarify mode of calculation of expenses incurred in relation to exempted income. (2) Whether the ITAT erred in law in deleting the addition made on account of income from interest without appreciating that the assessee is following mercantile system of accounting were the interest income would be considered on accrual basis. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t bank or] a State financial corporation or a State industrial investment corporation, the income by way of interest in relation to such categories of bad or doubtful debts as may be prescribed having regard to the guidelines issued by the Reserve Bank of India in relation to such debts; 9. Then the word 'prescribed' is defined under Section 2(33) of the Act. It means as prescribed under the Rules framed under the Act. 10. Rule 6EA (e) reads as below : (a)............... (b)............... (c)................ (d)............... (e) Debts recoverability whereof has become doubtful on account of shortfalls in value of security, difficulty in enforcing and realising the securities, or inability or unwillingness of the borrower to repay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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