2014 (7) TMI 1314

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....ion made by the Assessing Officer on account of writing off of advances and reimbursable amounts. 3. In assessment year 2009-10, vide I.T.A.No. 4563/Del/2012, the assessee is aggrieved with upholding of disallowance u/s 14A amounting to Rs. 31,23,402/-. In the same year i.e. 2009-10 the revenue is aggrieved with the action of Ld. CIT(A) by which he had deleted the addition on account of commission paid to Director amounting to Rs. 1,07,50,748/-. The Revenue is further aggrieved in this year by the action of Ld. CIT(A) by which he had deleted a disallowance of Rs. 75,450/- made by the Assessing Officer invoking clause (ii) of Rule 8D (2) of I.T. Rules. 4. We first take up the appeal of the assessee in I.T.A.No. 1672/Del/2012. Ld. A.R. at the time of hearing submitted that the issue of payment of commission to Director was decided by the Tribunal order in the case of the assessee itself for the assessment year 2005-06 and 2006-07. In this respect, our attention was invited to paper book at page 60-71. Our specific attention was invited to para 17.3 - 17.5 at pages 69-70. It was further submitted that in the succeeding year 2009-10, Ld. CIT(A) has also already deleted a similar ....

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....r attention to I.T.A.No. 4705/Del/2012 filed by the Revenue wherein Revenue had challenged action of Ld. CIT(A) as one of the grounds of appeal. Ld. A.R. submitted this that Ld. CIT(A) on the basis of facts and circumstances, had arrived at the conclusion that no interest bearing funds were utilized by the assessee in making investments, therefore, he had rightly given the relief. 7. Replying to the above arguments of Ld. A.R. in respect of assessee's appeal in I.T.A.No. 1672/Del/2012 Ld. D.R. submitted that commission paid to directors was quite excessive the Ld. D.R. therefore, Assessing Officer had rightly made the additions. As regards the assessee's appeal in assessment year 2009-10 in I.T.A.No. 4563/Del/2012, the Ld. D.R. submitted that Ld. CIT(A) had already allowed appropriate relief against which Revenue is already in appeal in I.T.A.No. 4706/Del/2012. 8. Arguing revenue's appeal in assessment year 2009-10 in I.T.A.No. 4706/Del/2012, Ld. D.R. submitted that payment of commission was quite high and therefore was rightly disallowed by the Assessing Officer and Ld. CIT(A) without considering the facts of the present case, followed the earlier order of the Tribunal in th....

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....nt year 2009-10 in I.T.A.No. 4706/Del/2012 is dismissed. 10. As regards I.T.A.No. 2584/Del/2012, ld. CIT(A) has deleted the addition by holding as under: ""Disallowance of Rs. 7,07,412/- on account of depreciation of Computer Peripherals, printer and UPS: With regard to the above issue the appellant made the following submission the gist of which is as under: "....The appellant company has claimed depreciation at the rate of 60% on addition of computer peripherals, printers, UPS etc. All these items as claimed form an integral part of the computer,........." "----- Ups/ switches/ cable/ port/ connectors etc. can be used only with the computers and cannot be used on standalone basis during the course of the Assessment proceedings/ a detailed list of the additions made to computers on which 60% depreciation was claimed by the assessee company was provided to the LO AO (copy enclosed as annexure-9 ) it is a well settled law now that the word computer has ,to be read as computer system comprising of the all connecting devices which are essential parts of the computers. In the light of judicial pronouncement of ACIT Vis. Container Corporation/ ITAT Delhi Be....

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....rsable expenses incurred by the assessee company which has been taken into income in previous years. IN order to differentiate the amount of fee and the expense the company records the 2 separately though the same is considered to be the income of the assessee in the year of raising of invoices. The AO on one hand has allowed fees written off while on the other he has disallowed the amount recoverable from the clients on account of expenses incurred. In the light of Judgement of TRF Limited Vs. CIT, as decided by Hon'ble Supreme court, in which the apex court has held that "This position in law is well-settled. After 1stApril, 1989, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee" (as per Annexure 13).--- 12. I have carefully considered the contentions of the appellant and have gone through the judicial precedents relied upon by the appellant. It is seen that the appellant has credited both the fees as well as out of pocket expenses to the Profit and loss account, hence Assessing Officer's observation is not correct t....