2014 (1) TMI 484

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....e dismissed as not pressed. 3. In Ground Nos. 2 & 3 the assessee has challenged the disallowance of write off of work-in-progress amounting to Rs. 15,29,600/-. 4. Briefly the facts relating to the issue in dispute are, the assessee company is engaged in the business of manufacturing of computer software programme and development of software products. For the assessment year under dispute the assessee filed its return of income declaring total loss of Rs. 41,82,190/-. Initially the return was processed u/s 143(1). Subsequently, on receiving information that income has escaped assessment, proceedings were initiated u/s 147 by issuing notice u/s 148. During the reassessment proceedings, the Assessing Officer while examining the profit and lo....

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....any correspondence. Ultimately the Assessing Officer rejected the claim of the assessee in absence of any evidence. 5. The assessee being aggrieved of the rejection of the claim of write off filed an appeal before the CIT(A). 6. Before the first appellate authority, the assessee reiterated the stand as was taken before the Assessing Officer. The CIT(A), however, was not convinced with the contentions raised by the assessee and was of the view that the work-in-progress cannot be written off merely in anticipation that no further amount should be received in future from the customer. The CIT(A) further observing that the assessee could not produce any evidence regarding the reasons for write off held that the disallowance made by the Assess....

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....e discontinued or cancelled their orders with the assessee the claim of write off of the work-in-progress was disallowed by the lower authorities. However, the learned Departmental Representative submitted that if the assessee is able to produce evidence the matter can be verified by the Assessing Officer again. 10. We have heard the submissions of the parties and perused the materials on record. The assessee has written off the work-in-progress by debiting it to the P&L a/c claiming that the customers have discontinued/cancelled the orders. It is the contention of the assessee that though the assessee has accounted for work-in-progress but billing was not done as the milestone was not reached as per the contract. It is the further content....