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of <h1>Appeals on Depreciation, Bad Debts, & Expenses Disallowance Decided: Key Points</h1> The appeals involved issues regarding the disallowance of depreciation, bad debts, and confirmation of vehicle and telephone expenses. The Tribunal ... - Issues involved: The judgment involves issues related to disallowance of depreciation, disallowance of bad debts, and confirmation of disallowance of vehicle and telephone expenses.Disallowance of Depreciation: The appeals arose from orders of the Commissioner of Income-tax confirming the disallowance of depreciation claimed by the assessee. The Assessing Officer disallowed a portion of the depreciation claim, alleging that the assessee had not claimed depreciation on fixed assets in previous assessment years. The Tribunal held in favor of the assessee, stating that depreciation should be allowed based on the written down value (WDV) at the end of the year without considering depreciation from earlier years. The Tribunal referred to a previous case where it was established that WDV should be ascertained by reducing the actual depreciation allowed to the assessee. Therefore, the appeals on this issue were allowed.Disallowance of Bad Debts: The Assessing Officer disallowed the claim of bad debts made by the assessee, stating that the debts were not bad but were discounts and commissions deducted by customers over several years. The Commissioner of Income-tax upheld this disallowance, concluding that the claim was misconceived and not justifiable. The Tribunal noted that these were not bad debts but business expenses that should be allowed if crystallized in the current year. The issue was remanded to the Assessing Officer for further examination to determine the crystallization of these expenses.Confirmation of Disallowance of Vehicle and Telephone Expenses: The Assessing Officer disallowed a portion of vehicle and telephone expenses claimed by the assessee. The Commissioner of Income-tax restricted the disallowance to a reasonable extent. The Tribunal found no reason to interfere with the Commissioner's order, as the disallowance was limited to 10%. Therefore, the order of the Commissioner was confirmed.Conclusion: Both appeals of the assessee were partly allowed based on the above decisions. The judgment was pronounced on March 26, 2010.
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