2021 (8) TMI 481

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....ribunal, Chennai "A" Bench, in I.T.A.No.260/Mds/2007 for the Assessment Year 2003-04. 2.The Revenue is the appellant before us and the appeal was admitted on 29.06.2009 on the following substantial questions of law : "1.Whether on the facts and in the circumstance of the case, the Appellate Tribunal was right in law in setting aside the order of the Lower authorities, even though the amount written off was incurred in the course of assessee's business and it was a capital item shown in the assessee company's balance sheet? 2.Whether on the facts and in the circumstance of the case, the Income Tax Appellate Tribunal was right in law in holding that the security deposit of Rs. 6 crores written off as irrecoverable....

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....see's balance sheet. Against such order, the assessee preferred an appeal to the Commissioner of Income Tax (Appeals)-I, Coimbatore, who dismissed the appeal by order dated 01.12.2006. Aggrieved by the same, the assessee preferred an appeal before the Tribunal, which has been allowed by the impugned order. 5.The Tribunal, in our considered view, has done thorough factual exercise as to the nature of business activities of the appellant and this has been brought out by the Tribunal in Para No.16 of the order, the operative portion of which, reads as follows : "16. ... As per the details mentioned in the assessment order, the assessee suffered a loss of more than Rs. 1.19 Crores within 6 months of the operation taken over by t....

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....ons for at least 24 months. But, when the assessee has discontinued the operation before the expiry of terms of the agreement, that would certainly disentitle the assessee for claiming the security deposit which was made for performance of its obligation under the agreement. Therefore, even otherwise, on the foreclosing of the agreement by the assessee before the expiry of its terms made the assessee disentitled from recovering the deposit and the same stands forfeited in view of the terms and conditions of the agreement. Though there is no such term about the forfeiture but when assessee agreed to have no right to terminate the agreement before the expiry of terms, then the violation of the said condition automatically led to forfeiture of....