AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (5) TMI 37
X X X X Extracts X X X X
X X X X Extracts X X X X
....e not filed by the assessee. 4. By the impugned order, the CIT(A) confirmed the disallowance of Rs.2,95,317/- and Rs.2,20,966/-, for which assessee is in further appeal before us, whereas in respect of amount of disallowance deleted by the CIT(A) in regard to balance of bad debts, the Revenue is not in appeal before us. 5. We have considered rival contentions and found that in respect of bad debts of Rs.2,95,317/-, the assessee has filed party-wise details of sales made to these persons, income accounted for and the reasons for the amount written off as bad debts. As per the certificate enclosed with the paper book, the assessee has filed these details before the lower authorities. Keeping in view the nature of the assessee's business vis-à-vis reasons given for bad debts, we consider it appropriate to restore the matter back to the file of AO for deciding afresh allowability of assessee's claim of bad debts of Rs.2,95,317/- by referring to the reasons given for the disallowance. The AO is to decide the matter afresh after giving due opportunity of hearing to the assessee. 6. During the course of hearing before us, learned AR has also drawn our attention to the copy of le....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e shall be given one more opportunity to furnish complete particulars including installed capacity, details of machinery etc. The assessee shall also submit a certificate from the Chartered Engineer regarding the installed capacity so that the requirement of the AO can be satisfied in this regard. Accordingly this ground is set aside to the file of the AO to decide the issue afresh after giving proper opportunity of hearing to the assessee." As facts and circumstances during the year under consideration are pari materia, respectfully following the decision of the Tribunal in assessee's own case for the A.Y.2004-05 (supra), this ground of the assessees's appeal is restored to the file of the AO for deciding afresh in terms of direction given by the Tribunal as quoted above. 9. The next grievance of the assessee relates to addition of MODVAT of Rs.32,43,539/- under Section 145A. We found that exactly similar issue was decided by the Tribunal in aforementioned order dated 30-7-2010, wherein the matter was restored to the file of AO with the following observations :- "7. The next ground was with respect to addition of closing ba....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in the manufacture of Reeds. 'Reed' is one of the most critical components in a compressor used in air conditioners, car air conditioners, hydraulic presses & it regulates the flow of air/gas in the compressor. In most compressors that are hermetically sealed, the compressor cannot be reopened during the lifetime; therefore the Reed that is the most critical component has to be of the highest degree of accuracy and quality. Each Reed has to be capable of performing millions of operations in the compressor. We enclose herewith few photocopies/ brochures showing the nature of 'Reed'. Reed is an import substitute product and the Assessee has been one of the pioneers in developing it in India. It has some very large multinationals as its customers The Reed is manufactured out of special steel imported from sandvick. The Reeds are manufactured by a process of blanking the special steel. For blanking the Assessee needs high quality blanking tools. Blanking Tools are like consumables, which wear out after some time & have to be reported through development of new tools. For manufacturing of high quality Reeds, it is necessary that th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....xplanation and without referring the matter to the prescribed authority being the department of Scientific and Industrial Research, declined the assessee's claim at its own. By the impugned order, The CIT(A) allowed assessee's claim after having following observations :- "8.2. I have carefully considered the above issue and I find there is depth in the statement of the appellant wherein it has been stated that a technical issue cannot be decided by the AO simply by disregarding the details that have been produced by the; appellant carries weight. The Income Tax Act provides section 35 (3) to deal with any doubts that may be entertained by the assessing officer while dealing with the claim made under the said section. In this case the provisions of this section have not been followed by the AO at all. The assessing Officer has dismissed the claim of appellant in a summary manner basing his argument on a presumption that the wire cutting machine was used in the manufacturing process of the appellant and therefore is a normal plant and machine. I find that the AO has not discussed the issues raised by the appellant re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e to the Board, in turn, refer the question to the prescribed authority, which is Department of Science and Industrial Research, whose decision shall be final." Thus, the disallowance can be made by the AO as per provisions contained under Section 35(3) by referring the matter to the Department of Science and Industrial Research. In the instant case before us, the AO has not accepted assessee's contention regarding use of CNC wire cutting machine in research and development, so as to allow its claim under Section 35(iv). Before the AO, the assessee has made a specific request vide letter dated 31-12-2007 for making reference to the Department of Science and industrial Research. However, without making any such reference the AO has declined assessee's claim under Section 35(1)(iv) at his own. The CIT(A) allowed assessee's claim by observing that the AO has no discretion under Section 35(3), but to comply with the said Section in case of any doubt regarding allowability of claim of deduction under Section 35(1)(iv). The CIT(A) further observed that the AO had no jurisdiction to dismiss a technical matter without taking the opinion of the competent body as clearly stated in Section 35....