TaxTMI 
TaxTMI 
2014 (7) TMI 458
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd completed the same by making various additions. The assessment relating to the assessment year 2007-08 was completed u/s. 143(3) of the Act by making various additions. Aggrieved by the assessment orders passed for both the years, the assessee preferred the appeals before the Ld. CIT(A) and the appeals were partly allowed. Aggrieved, both the parties have filed these appeals before us on the issues decided against each of them. 3. We shall take up the appeal filed by the assessee for the assessment year 2006-07. The first issue relates to the validity of re-opening of the assessment. The Ld. Counsel for the assessee submitted that the Assessing officer has reopened the assessment, only on change of opinion and hence the re-opening is not valid. In this regard, he placed reliance on the decision of the Hon'ble Supreme Court rendered in the case of CIT vs. Kelvinator India Limited (187 Taxman 312). 3.1 On the contrary, the Ld. DR submitted that the Assessing officer had adequate reasons to believe that the income has escaped assessment. He further submitted that the Ld CIT(A) has examined the contentions of the assessee in detail and has upheld the validity of the re-opening. 3....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tentions on this issue. The Ld. AR submitted that the assessee has computed the amount of depreciation by adopting correct amount of Written down Value of the assets and also by applying the applicable rates. He further submitted that the difference between the amount of depreciation shown in the tax audit report and in the return of income has arisen on account of consideration of incorrect rate of depreciation on automatic voltage controller and motor cars purchased in 1998-99 and 2001-02 which had the cascading effect in the subsequent years resulting in carry forward of wrong amount of WDV. The Ld. AR further submitted that the Assessing officer is required to determine correct amount of total income and in that process he is required to ascertain the correct amount of deduction admissible under the Act. Accordingly, he submitted that the tax authorities are not justified in not examining the explanations furnished by the assessee. 4.3 On the contrary, the Ld. DR placed strong reliance on the order of the Ld. CIT(A) on this issue. 4.4 We have heard the rival contentions on this issue. In our view, as pointed out by the Ld. AR, the Assessing officer is required to ascertain th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....see. 5.1 Before the Ld. CIT(A), the assessee placed reliance on the decision rendered by the Delhi Bench of the Tribunal in the case of Punjab National Bank vs. ACIT (I.T.A. No. 2047/Del/2007 dated 25-10-2011 relating to the assessment year 2005-06). The Ld. CIT(A) however took the view that the decision rendered by the Delhi Bench of Tribunal centers around the applicability of provisions of sec. 41(1) of the Act. On the contrary, the Ld. CIT(A) placed reliance on the decision rendered by the co-ordinate bench of the Cochin Tribunal in the assessee's own case in I.T.A. Nos. 98&99/Coch/2002 relating to the assessment years 1997-98 and 1998-99 and accordingly, directed the Assessing officer to decide this issue as per the directions given by the Tribunal. For the sake of convenience, we extract the relevant observations made by the Ld. CIT(A) on this issue: "16.6 On identical issue, the ITAT Cochin Bench in I.T.A. Nos. 98 & 99/Coch/2002 for the A.Ys 1997-98 ad 1998-99 in appellant's own case has held that: "The amount, which has been credited, is in respect of transactions between the Head Office and the Branch Office or the Branches inter se. If the amount has been credited in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted. Since the assessee did not furnish the details, the AO disallowed 50% of the amount claimed as loss in the value of securities. 6.1 The Ld CIT(A) accepted with the principles expressed by the AO, but directed the AO determine the actual quantum, instead of making adhoc disallowance. 6.2 The Ld A.R submitted that the assessee has been following consistent method of valuing stock in trade at Cost or market value, whichever is less. Accordingly he submitted that market value has to be necessarily ignored, if it is more than the cost, since the said appreciation is notional until it is actually realized. He further submitted that the assessee has valued the stock in trade according to the method consistently followed and hence there is no requirement to disturb the loss claimed by the assessee. 6.3 On the contrary, the Ld D.R pointed out that the assessee has failed to furnish the details called for by the AO and hence the AO was constrained to make the disallowance on estimated basis. 6.4 We have heard rival contentions on this issue. According to the assessee, it has been consistently following the method of valuing the stock, viz., "Cost or market value whichever is less". ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing the bad debts written off to the provision for bad and doubtful debts account created u/s 36(1)(viia) of the Act resulting in duplication of claim of bad debts in violation of the provisions of section 36(1)(vii) r.w.s 36(1)(viia) r.w.s 36(2)(v)" However, according to the assessee, it has been debiting the bad debts written off only to the "Provision for bad and doubtful debts account" and only the debit balance available in the above said Provision account was claimed as deduction. Thus, we notice that observations made by the AO and the submissions made by the assessee contradicts with each other. 7.1 There appears to be no dispute for claiming deduction both u/s 36(1)(vii) and 36(1)(viia) of the Act. The dispute relates to the issue viz.., whether the assessee has complied with the proviso to 36(1)(vii) of the Act. Hence, this issue also requires only clarification, i.e., the assessee has to satisfy the AO that it has debited the bad debts written off by it (a) first to the "Provision for bad and doubtful debts account" and (b) the net debit balance found in the provision account was only claimed as deduction u/s 36(1)(vii) of the Act. Hence, in our view, this matter also ....