TaxTMI 
TaxTMI 
2011 (5) TMI 583
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....er to allow bad debt of Rs. 25,84,994/- being margin money deposit with National Electrical Power Authority of Nigeria even though the primary condition of the provisions of section 36(2)(i) was not satisfied as the assessee did not establish that the said amount was taken into account in computing the income of the previous year or any earlier previous year. 3) On the facts and circumstances of the case and in law, learned CIT(A) erred in directing the Assessing Officer to delete the addition of Rs. 23,34,326/- on account of disallowance u/s. 40A(2)(b) being 25% of labour charges paid to sister concern M/s. Paramount Commercial Corporation. 4) The appellant prays that the order of learned CIT(A) on the grounds be set aside ....
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....e learned CIT(A) that under identical circumstances addition was deleted by learned CIT(A) in assessee's own case for A.Y. 2005-06 and accordingly no addition is called for. Learned CIT(A) extracted the order of his Predecessor in assessee's own case for earlier years wherein it was stated that procedure prescribed in section 145A is mandatory but while applying procedure prescribed therein value of opening stock, purchases, sales as well as closing stock are required to be adjusted, in which event there is no impact on profit. It was further stated that even u/s. 43B of the Act so long as taxes were paid before the due date of filing of return of income addition cannot be made. Accordingly, learned CIT(A) set aside the addition. 5.....
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....ing Officer noticed that out of the total sum debited to the profit and loss account, an amount of Rs. 25,84,994/- is referable to the sum payable by NEPA of Nigeria which was kept as margin money and the assessee has not established that the amount referred as margin money is a 'debt' and has become actually 'bad'. He therefore disallowed a sum of Rs. 25,84,994/-. 8. On an appeal filed by the assessee, learned CIT(A) verified the records and gave categorical finding that the assessee has already offered sale proceeds as income in the earlier year and therefore sum written off in this year is allowable as deduction u/s. 36(1)(vii) of the I.T. Act. In this regard he relied upon the decision of ITAT Mumbai Special Bench in the case of....