TaxTMI 
TaxTMI 
2017 (2) TMI 646
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.... are that assessee is engaged in providing transportation and warehousing and related support services. During the course of scrutiny assessment, AO made disallowance on account of foreign exchange fluctuation loss, lost stocks. Addition was also made on share application money u/s.68. Disallowance was also made u/s.40(a)(i) of the Act. 4. By the impugned order CIT(A) deleted the addition made u/s.68 amounting to Rs. 2,41,12,500/- by following the order of earlier assessment year passed by its predecessor. We found that addition so made by AO and deleted by CIT(A) in the preceding assessment year 2007-08 was confirmed by the Tribunal vide order dated 30/09/2015 after having the following observation. 7. We have carefully conside....
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....in the order of CIT(A) for deleting the addition made u/s.68 of the IT Act. 6. Disallowance made u/s.40a(ia) amounting to Rs. 5,79,95,330/- was restored back by the CIT(A) to the AO for verification and deciding afresh after having the following observation. I have considered the facts of the case. This issue has arisen in CIT(A)'s order of A.Y.2007-08 wherein in para 7.3 it is held as under: "7.3 I have considered the facts of the case as explained by the appellant in earlier paragraph giving the details of amount reimbursed and the head/purpose on account of which the amounts were reimbursed. In respect of reimbursement on account of salary cost the provisions of sec.195 were not applicable. In respect of purchase....
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....not attract provisions of section 195 of the Act based on various decisions of Bombay and other High Courts. We found that after considering the details, the Learned AO was satisfied that these are pure reimbursements and therefore section 195 read with section 40(a)(i) of the Act does not apply and accordingly deleted the entire disallowance of Rs. 5,79,95,330. In view of the above, Departments' ground cannot survive since the Learned AO has already verified the details and has accepted that these are pure reimbursement, not attracting provisions of section 195 of the Act. Accordingly, we dismiss the ground raised by the Revenue. 8. Assessee is aggrieved for disallowance on account of loss of stock. In this connection, the Assessee ....
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....n the ground that the same was on account of a mere Provision for doubtful debts. The CIT(A) has since deleted the addition on the ground that in sum and substance the impugned sum of Rs. 65,40,000/- was actually a bad debt written-off and not merely a Provision for bad and doubtful debts. As per the CIT(A), the impugned sum was deductible under section 36(1)(vii) r.w.s. 36(2) of the Act. Against such a decision, Revenue is in appeal before us. In the course of assessment proceedings, the Assessing Officer noticed that assessee had debited Provision for bad and doubtful debts of Rs. 65,40,000/- to the P&L Account. On being asked to explain, assessee contended that the impugned sum was in the nature of non-recoveries from the customers. It w....
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....firstly the provisions were not allowable as business expenses and secondly the details thereof were not furnished by appellant. On the other hand the appellant has explained that the Assessing Officer had made addition without asking for details of such provision actually not a provision. The appellant has explained that the amount of Rs. 65,40,000/- was actually not a provision but represented the actual amounts receivable from the clients which could not be recovered and hence constituted a bad debt. The amount represented short recovery of transportation charges from the clients on account of losses occurred on account of retention, loss of stock and damage to stock whereas the transport invoices were accounted in the books of accounts ....
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....the aforesaid finding of the CIT(A) in the absence of any credible material or reasoning brought out by with the Revenue before us. Thus, on this aspect also Revenue fails. 10. We have considered rival contentions and carefully gone through the orders of the authorities below as well as order of the Tribunal dated 30/09/2015 in assessee's own case, wherein facts and circumstances were similar. 11. Respectfully following the order of the Tribunal, we do not find any merit for the disallowance of Rs. 1,03,86,501/- made on account of loss of stock. 12. Next grievance of assessee relates to disallowance on account of foreign exchange fluctuation loss. We found that assessee has raised this ground before the CIT(A), however, CIT(A) has ....