2014 (5) TMI 467

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....support of its claim during the assessment proceedings and the auditors of the assessee categorized this amount under the head "assets written off" which means that it is of capital nature." 2. Brief facts are: The assessee is a public limited company, listed on the Bombay Stock Exchange. For the impugned assessment year the assessee filed its return declaring loss of Rs. 38,55,463/- which was processed u/s 143(1). Thereafter the assessment was reopened on a reason that 143(1) assessment had resulted in over assessment of loss of Rs. 71,12,659/-. 2.1. The assessee in its assets had a block of assets, WDV whereof amounted to Rs. 1,92,67,778/-. Due to expiry of the lease, assessee had to vacate the premises and close its business, therefore....

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.... rented premises. The assessee had to close its business as lease has expired and had to vacate the impugned premises. The realized value of assets sold was already credited and since the balanced items were to be discarded, they had no realizable value from the point of view of a businessman. Therefore, the loss was claimed in P&L a/c. Assessing officer failed to appreciate that as per the scheme of block of assets, the assessee having been dispossessed of the assets its realizable value was nil and the difference was eligible to be claimed u/s 32(1)(iii). CIT(A) found favour with the explanation of the assessee and deleted the disallowance by following observations: "5.2. I find force in the submissions made by the assessee company in so....

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....before us. 3. Ld. DR contends that the order of ld.. CIT(A) is not correct on following points: (i) It is not clear that the balance of the assets were abandoned by the assessee or kept some where else and they had realizable value or not. Assessing officer has held that no evidence has been filed. (ii) Reliance is placed on the Hon'ble Delhi High court judgment in the case of Allied Electronics and Magnetic Ltd. Vs. DCIT 304 ITR 160; and that of Hon'ble Kerala High court in the case of CIT Vs. Cooperative Wholesale Society 195 ITR 361. 4. Ld. Counsel for the assessee on the other hand contends that the ld. Assessing officer has not doubted the fact that assessee had to vacate the premises due to expiry of lease and closure of business.....

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....alance of assets were neither capable of being sold nor had any realizable value as per the clear provisions of sec. 32(1)(iii) above. The claim is to be allowed. Reliance is placed on following case laws: - Ace Camera Equipment (P) Ltd. Vs. CIT 150 ITR 227 - Guidy Machine Tools (P) Ltd. Vs. CIT 254 ITR 780 - CIT Vs. Aruna Sizing Mills 127 ITR 186 4.2. It is pleaded that ld. CIT(A) has rightly allowed the claim of the assessee in terms of clear provisions of law. The order of CIT(A) is relied upon. 5. We have heard rival contentions and perused the material available on record. We find no infirmity in the order of CIT(A) in as much as: (i) The claim of the assessee clearly falls within the scope of sec. 32(1)(iii). The part of the amo....