2019 (1) TMI 1197

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...., New Delhi dated 17.02.2011 pertaining to A.Y 2006-07. The Revenue has also filed an appeal against the order of the CIT(A) dated 2.5.2013 pertaining to A.Y 2006-07. Since the underlying facts and issues involved in these appeals and cross objection are identical and pertain to same assessee, they were heard together and are disposed of by this common order for the sake of convenience and brevity. 2. Briefly stated, the facts of the case are that uptil 31.12.2004, the assessee was providing the Customer Premises Equipment (CPE) which consists of set top box, dish antenna LNB and cable to the consumers by way of outright sale of the equipments. Accordingly, the result, as reflected in the accounts of the assessee was that the sales of CP....

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.... the policy was accepted by the Assessing Officer and no malafide intention has been brought on record on the part of the assessee. Any loss incurred by the assessee in respect of trading goods has to be allowed as business loss. We, therefore, do not find any reason to interfere with the findings of the CIT(A). This ground is dismissed. 7. With the new policy, the distributors were now engaged for services rendered for leasing out and installing the CPEs at the customer's premises on behalf of the assessee. In lieu of such services, the assessee paid distributor's commission and distributor's incentive. The Assessing Officer was not convinced with the claim of the assessee. The Assessing Officer was of the firm belief that these expense....

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....grounds in Revenue's appeal are dismissed. 11. The next grievance of the Revenue's appeal relates to freight and cartage outward holding it as capital loss/capital expenditure in nature. 12. It appears that the Assessing Officer has misunderstood the facts of the issue. He was carried away by the capitalisation of freight inward expenses and accordingly, treated freight and cartage outward as capital expenditure. At this stage, we would like to make it clear that freight inward is paid when the goods are unloaded and transferred to the godown. Such expenditure is definitely part of the goods so unloaded and the same needs to be capitalised. Freight outward, on the other hand, is expenditure incurred when the goods are loaded to transp....