TaxTMI 
TaxTMI 
2019 (5) TMI 181
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the amounts related to the said parties were shown as income for taxation in earlier years. (2) The Id. CIT(A) has erred in law and on facts in deleting the addition of Rs. 13,61,057/- made u/s 145A of the Act without appreciating the fact that the assessee is following exclusive method of accounting without any change. (3) The Id. CIT(A) has erred in law and on facts in directing to verify the contention of the assessee that no interest bearing funds were utilized in connection with the capital work in progress without appreciating the fact that the assessee has failed to prove the nexus of utilization of non- interest bearing fund. (4) The Id. CIT(A) has erred in law and on facts in deleting the addition made u/s 2(22)(e) of Rs. 6,46,30,742/- without appreciating the fact that in the case of Corrtech International Pvt. Ltd., the fact of the case differs from earlier year and in the case of Control Plus Oil & Gas Solutions, the company is a subsidiary company of the holding company. 4. Brief facts of the case are that the assessee is engaged in the business of manufacturing gas turbine blades, engineering services, contract of gas turbine and trading....
X X X X Extracts X X X X
X X X X Extracts X X X X
....therwise also, deposits made by the assessee were in the nature of security deposits made during the course of normal business and was integral part of the business carried out by the assessee, and therefore, irrecoverable deposits written off should be allowed as trading loss/business loss under section 37 of the Act. 7. We have duly considered rival submissions and gone through the record carefully. Assessee has debited 37,27,034/- as bad debts. Out of the above, a sum of Rs. 10,14,810/- was not allowed by the AO on the ground that this amount did not suffer income-tax in earlier assessment years. In other words, it was not part of the assessee's income. The ld.CIT(A) remitted this issued to the file of the AO for verification and observation that if it was found to be part of assessee's income of earlier years, then it be allowed as deduction. On the other hand, alternative contention of the assessee is that, if it is not allowed as bad debts, then it be allowed as business loss. This pleading has been taken in the CO. After taking into consideration both the submissions of the assessee, we deem it appropriate to modify the direction of the ld.CIT(A). We uphold the remittance....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ITA No.1358/Ahd/2009, therefore, order of the ld.CIT(A) on this issue be not disturbed. 11. We have considered submissions of both the parties and also gone through the record carefully. It is not disputed by the Revenue that the assessee has been following consistently the method of valuation of closing stock i.e. exclusive method of accounting for valuation of purchase and sale of goods and inventory. Assessee is maintaining separate books for CENVAT. We find that the position of law on this issue is clear. CENVAT will form part of closing stock only when the same is debited to the profit and loss account i.e. at the time of actual payment. Addition and/or deduction of CENVAT to the value of closing stock has no impact on financial position of the assessee, as the same is revenue neutral. The ld.CIT(A) has accepted the method adopted by the assessee in the light of various judgments. Therefore, we do not find any merit in this ground of appeal of the Revenue. It is dismissed. 12. In ground No.3 of the Revenue's appeal and ground no.4 of CO of the assessee, common issue is raised, which relate to addition of Rs. 14,56,331/- on account of interest paid on capital work-i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....AO for verification of this claim, with direction to allow the same if he finds the same to be correct. This direction of the ld.CIT(A) cannot said to be incorrect or unjust. No prejudice will be caused to the both parties, if further verification of the facts is made to meet ends of justice. Therefore, we are not inclined to interfere in the direction of the ld.CIT(A) on this issue, the same is confirmed, and this ground in both the appeal of the Revenue and the CO of the assessee is rejected. 16. In ground no.4, Revenue is aggrieved by the action of the ld.CIT(A) in deleting addition made by the AO under section 2(22)(3) of Rs. 6,46,30,742/-. 17. Brief fact of the matter is that during the assessment proceedings, the ld.AO noticed that the assessee has received an amount of Rs. 6,09,98,428/- from Control Plus Oil & Gas Solutions P.Ltd., and also received an amount of Rs. 36,32,314/- from Correct International Pvt.Ltd. during the year. Assessee was show caused as to why advance received from two companies should not be considered as a deemed dividend. Assessee submitted that these advances were temporary business loan which were paid by them in the year under consideration a....