2022 (10) TMI 975

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....ed by the ACIT (OSD) / DCIT, Company Circle 1(2), Chennai for the assessment years 2010-11 & 2011-12 u/s.143(3) r.w.s. 92CA of the Income Tax Act, 1961 (hereinafter the 'Act') vide orders dated 12.03.2014 & 20.03.2015 respectively. 2. At the outset it is noticed that these appeals are barred by limitation by 426 days and the order of CIT(A) was received by assessee on 16.12.2019 and due date for filing of appeals was 15.02.2020 but assessee filed these appeals before Tribunal on 15.04.2021 and thereby there is a delay of 426 days. The ld.counsel for the assessee stated that delay attributable with a cause is only 40 days and for this, he filed affidavit stating the reasons that this being a Chinese company and assessee was in China since....

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....given directions that the delay are to be condoned during this period 15.03.2020 to 14.03.2021 and they have condoned the delay up to 28.02.2022 in Miscellaneous Application No.21 of 2022 vide order dated 10.01.2022, we condone the delay in filing of these appeals by assessee and admit the appeals for adjudication. 3. The only common issue in these two appeals of assessee is as regards to the order of CIT(A) confirming the action of AO in not considering the rental deposits written off amounting to Rs.2,89,42,376/- in assessment year 2010-11 and Rs.70,29,260/- in assessment year 2011-12 as revenue and allowing the same u/s.37(1) of the Act. The facts and circumstances are identical in both the years and hence, we will take the facts from....

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....t had taken various measures to recover the rental deposit such as filing a suit before the High Court. In this context, the Lease and Rental Agreement between the lessor, M/s. Mahaveer Safety Glass Company Pvt Ltd and the lessee, the appellant was examined. It was agreed that the lessor would hand over to the appellant possession of parcel of land measuring 50,000 sq.mts with constructed warehouse for a period of 3 years with effect from 1/2/2008. It was stated that the lessee i.e. the appellant would pay an advance of Rs.1,70,00,000/- to the lessor after signing the agreement which would be refunded on termination of lease and handing over of possession of the said property to the lessor. The said advance amount did not carry any interest....

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...., Irungattukottai. The assessee could not occupy the property since the required permission was not taken by the owner of the land from Sipcot and lease could not be finalized. The assessee has filed recovery proceedings by filing a suit before the Hon'ble Madras High Court but that is pending. In the mean time, the assessee had made this claim of rental deposits as write off and claimed as allowable expenditure u/s.37(1) of the Act. For this proposition, the ld.counsel for the assessee filed copy of judgment order of Hon'ble Madras High Court in the case of CIT vs. Pricol Ltd., [2021] 139 taxmann.com 459, wherein exactly on identical facts, the facts narrated by Hon'ble High Court read as under:- "4.The assessee is a company which....

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....bunal, which has been allowed by the impugned order." The Hon'ble Madras High Court has considered this issue and confirmed the order of Tribunal treating the same as business expenditure by observing in para 6 as under:- "6. From the facts noted by the Tribunal as mentioned above, while granting relief to the assessee by treating the expenditure as business expenditure, the Tribunal took note of the fact that the Assessing Officer and the Commissioner of Income Tax (Appeals) have not disputed the details regarding the income and expenditure furnished by the assessee and the Assessing Officer only concluded that, since the security deposit is in the nature of a capital expenditure, the same cannot be allowed as a business loss. ....