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Income Tax Appellate Tribunal, HYDERABAD ‘ A ‘ BENCH, HYDERABAD.
Before: SHRI S.S. GODARA & SHRI LAXMI PRASAD SAHU
O R D E R Per Shri S.S. Godara, J.M. : This assessee’s appeal for Asst. Year 2012-13 arises from the Commissioner of Income Tax (Appeals)-5, Hyderabad’s order dt.28.02.2017 passed in case
No.0032/2015-16/CIT(A)-5 in proceedings under Section 143(3) of Income Tax Act, 1961 (‘the Act’).
Heard both the parties. Case file perused.
The assessee has raised the following substantive grounds in the appeal :
“2. The learned CIT (Appeals) erred in confirming the addition of Rs.29,09,138 made by the Assessing Officer u/s. 14A of the IT Act. 3. The learned CIT (Appeals) erred in confirming the disallowance of Rs.7,31,668 made by the Assessing Officer u/s. 40(a)(ia) of the I.T. Act. 4. The learned CIT (Appeals) erred in confirming the disallowance of bad debts debited to the profit and loss account of Rs.46,74,98,650.”
We come to the first and foremost issue of section 14A r.w. Rule 8D disallowance of Rs.29,09,138 made by both the lower authorities. It emerges at the outset that the assessee has not derived any exempt income in the impugned assessment year. That being so, we quote Cheminvest Ltd. Vs. CIT (2015) 378 ITR 33 (Del); CIT Vs. Chettinad Logistics Pvt. Ltd. 80 taxmann.com 221 (Mad) and CIT Vs. Corretech Energy Pvt. Ltd. 223 Taxman 130
(Guj) that the impugned disallowance does not apply in absence of any such exempt income. The same is directed to be deleted for this precise reason alone.
Next comes section 40(a)(ia) disallowance of Rs.7,31,668 pertaining to TDS deduction qua auditors remuneration, selling and other expenses, R&D expenses, security charges, legal and professional charges and miscellaneous expenditure. The Revenue’s case as per learned lower authorities detailed discussion is that the assessee had although deducted TDS on these payments to them but failed to remit the same to the government account. Learned counsel, on the other hand, quoted sec.
40(a)(ia), 1st proviso that such an expenditure is to be allowable as a deduction for its previous year in which the TDS in issue stands deposited. We thus restore the instant issue back to the Assessing Officer to be examined afresh in light of foregoing proviso as per law.
Lastly comes bad debt disallowance issue of Rs.46,74,98,650 pertaining to receipt towards sale price of power and the amounts which could not be recovered from the concerned government companies.. The Assessing Officer observed in his assessment order dt.16.3.2015 that the assessee had failed to furnish all the cogent evidences that the impugned sum had been first debited and the corresponding party’s ledger had been credited to this effect followed by closure of the account.
The assessee's case, on the other hand, is that it had reduced the power unit rates to public sector company(ies) to this effect. Faced with this situation, we are of the opinion that the instant issue of bad debt pertaining to public sector companies also requires afresh detailed examination regarding alleged corresponding power units rates’ reduction from the assessee's side. We make it clear that the Assessing Officer shall also examine the instant issue from the point of view of business loss u/s. 28 r.w.s. 37(1) of the Act as well. Ordered accordingly.
This assessee's appeal is partly allowed in above terms.