AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (7) TMI 513
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.... The assessee is a company engaged in the business of manufacture and sale of valves for sugar and paper machinery. The return of income was filed on 30.9.2009 declaring an income of Rs. 81,01,250/-. The assessment was taken up for scrutiny by issuance of notice u/s 143(2) of the Act. In the course of scrutiny assessment proceedings, it was noticed that assesseee had debited a sum of Rs. 10,83,639/- to the P & L account under the head "LD deducted by Mawana Group". The AO showcaused the assessee to explain, the said debit in the profit and loss account. In response, it was submitted that there was an outstanding amount of Rs. 39,75,639/- due to the assessee from Mawana Sugar Mill Group against the supply of valves during the asstt. year 200....
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....ned by said M/s Mawana Group, pursuant to firm purchase orders placed by them, under the cover of followi'1g sales bills: Name Amount Mawana Sugar Works 2820771.00 Nagla Mal Sugar complex 4435613.00 Titawai Sugar Complex 4822416.00 12078800.00 Thus the above sale of Rs. 12078800.00 formed part of the total turnover shown by assessee in its return filed for A Y 2007-08. The sale bills, however, were debited individually to the concerned units of M/s Mawana Group and the payment as and when received was credited to the respective accounts. Despite lots of persuasion, the bills remained unsettledtil/31.3.2008, showing a total outstanding of Rs. 3975639.00 in their account. The blocked funds were causing financial ....
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....account for the year ending 31.03.2007, also qualified the hurdle as created by sub-section (2) of section 36. , Since its recoverability crystallized only on 15.04.2008, i.e relevant to previous J year 2008-09, it was rightly claimed as bad debt in A Y 2009-10. Thus, all the ingredients on section 36(1)(vii) r.w. sub-sec (2) of 36 were fulfilled. Though is self evident that the above debt had become bad, as held by Hon'ble Supreme Court in the case of TRF Lid v CIT (2010) 230 CTR (SC) 14, it is not necessary, after amendment of section 36(1)(vii) w.e.f. 1.4.1989, to establish that a debt has become bad. 4. Alternatively, the said loss is also allowable u/s.28 or the residual section 37, . not be1ng a capital expenditure, having been i....
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....has been contended by the appellant that it had made sales of industrial valves and cock to three units own by M/s Mawana Group pursuant to purchase orders placed by them under the cover of following sale bills:- S. No. Name of Unit Amount at of sales (i) Mawana Sugar Works . Rs. 28,20,771/- (ii) Nagla Mal Sugar Complex Rs. 44,35,613/- (iii) Titawi Sugar Complex Rs. 48,22,416/- Rs..l ,20,78,800/- As per the appellant the above sale of Rs.l,20,78,800/- formed part of total turnover shown by the appellant in its return of income filed for A.Y.2007- 08. The bills amounting to Rs. 39,75,639/- remained unsettled till 31-03- 2008. Since the blocked funds were causing financial hardship to the appellant, therefore, a onet....
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....unts of the assessee so as to claim deduction u/s 28 of the Act. " 6. The revenue being aggrieved is in appeal before us. The Ld. DR supported the order of the AO. On the other hand, the Ld. AR reiterated the submissions made before the Income Tax authorities and placed reliance on the finding of the Ld. CIT(A). 7. We have heard the rival submissions and perused the material on record. The assessee had made sale of valves to Mawana Sugar Mill group of concerns amounting to Rs. 1,20,78,800/- by three sales invoices during the financial year relevant to A.Y. 2007-08. Thus sale of Rs. 1,20,78,800/- was part of the total turnover for A.Y. 2007-08. Payments as and when received from Mawana group was credited to the assessee's account. However,....