TaxTMI 
TaxTMI 
2010 (1) TMI 869
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....served by the AO that it represented the old balances on capital account written off by the assessee now. The A.O. observed that even the Auditors in Tax Audit Report have categorized this amount as expenditure of capital nature debited to the profit and loss account. On being called upon to justify the deduction of the said amount, the assessee stated that it was in nature of bad debt and hence should be allowed. At the same time it was also mentioned by the assessee that the condition laid down in section 36(2) was not fulfilled as these amounts were not included in the income of earlier year(s). In the alternative it was contended that the deduction be allowed u/s.37(1). Not convinced the Assessing Officer made the addition. No relief was allowed in the first appeal. 4. We have heard the rival submissions and perused the relevant material on record. The learned Counsel for the assessee fairly conceded that these payments were made in earlier years on capital accounts. As the said amounts were found to be not recoverable, the ld. AR stated that the assessee thought it prudent to write off the said amount in the profit and loss account. The learned A.R. relied on the judgment o....
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....mutandis similar to those decided by the Tribunal in assessment year 1997-98. After considering the rival but common submissions and respectfully following the precedent, we allow this ground of appeal. 7. Ground no.3 is against the confirmation of addition of Rs.6,65,28,676 towards expenditure on implementation of software system. Ground no.4 is against upholding the addition of Rs.12,08,973 u/s.40A(9) and ground no.5 is against the confirmation of addition of Rs.10,69,09,754 towards development expenses paid to M/s.AVL, Austria. On these three grounds both the sides are in agreement that the facts and circumstances of these grounds are similar to those already decided by the Tribunal in the above referred order for assessment year 1997-98 in which the order of the CIT(A) was set aside and the matters were restored to the file of A.O. In view of these submissions and respectfully following this precedent we set aside the impugned order on these three grounds and restore the issues to the file of the A.O. for deciding it afresh in accordance with the directions given by the Tribunal in the immediately preceding assessment year. 8. Ground no.6 is against the chargeability of i....
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....cer to consider the assessee's claim for deduction as per law. The matter is being sent to the Assessing Officer instead of the learned CIT(A) for the reason that certain other grounds have also been restored to the file of A.O. and it is not proper to send one part of the order to the AO and the other to the ld. first appellate authority. Needless to say the assessee will be given adequate opportunity of hearing before decision on this issue. 12. Ground no.1 of the Revenue's appeal is against the deletion of addition of Rs.23,05,076 made by the A.O. u/s.40A(9) on account of payment to different clubs. Ground no.2 is against the deletion of disallowance of provision for warranties of Rs.4.38 crores. Ground no.5 is against the deletion of disallowance of provision for pending labour demands of Rs.5.26 crores for which negotiations were still going on. Ground no.7 is against the deletion of disallowance of Rs.2.18 crores on account of special pension liability. Ground no.10 is against the direction given by the learned CIT(A) to A.O. for excluding the amount of sales-tax from the total turnover for the purpose of computing deduction u/s.80HHC. 13. Both the sides are in agreemen....
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....ival submissions and perusing the relevant material on record we find that no details of this amount are available on record. The claim of the assessee before the learned CIT(A) was that the company made advances for procurement from various suppliers and sub-contractors and due to certain reasons sometimes the amounts were locked up and the unadjusted amounts were periodically cleared by writing off the amounts. The facts of this ground appear to be somewhat similar to ground no.1(2) of the assessee's appeal which has been dismissed by us above for the reason that it was write off of capital loss. In the absence of any detail about the writing off of advances of Rs.8.89 lakhs, being the subject matter of this ground, we are unable to adjudicate upon this issue. We, therefore, set aside the impugned order and restore the matter to the file of A.O. for considering whether such advances written off were advanced on capital or revenue account and then decide the issue as per law. 17. Ground no.6 is against the deletion of disallowance of provision for leave encashment of Rs.2.26 crores. The A.O. held that the provision for leave encashment was in the nature of contingency and hence....