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2010 (12) TMI 733 - ITAT, MUMBAIPayment to sister concern - disallowance 40A(2)(a) - Held that:- We are surprised that the learned CIT(A) also has not understood provisions of section 40A(2) and confirmed the addition on presumptions. The assessee has furnished details of its client-wise billing and income statement which indicates that profit margin varies from 5.1% to 9% in large number of clients' accounts. Since the A.O. has not rejected the books of account nor countered the facts as submitted by the assessee in the business with reference to other Ad business conducted, we are of the view that the A.O. has wrongly invoked provisions of section 40A(2) for making an addition on so called profit margin which itself is not sustainable in any other way considering the facts of the case. In view of this, we delete the addition so made. Assessee's ground on this is allowed. Software expenses as capital expenditure -similar issue was raised in assessee's own case in A.Y. 2000-01 and 2004-05 and in these years the matter was remanded to the file of the A.O. for taking a fresh decision in accordance with the view taken by the Special Bench of the Tribunal in Amway India Enterprises vs. DCIT (2008 -TMI - 64346 - ITAT DELHI-C).Respectfully following the precedent, we set aside the impugned order on this issue and restore the matter to the file of the A.O. Repairs and renovation expenses carried out at lease premises, - The expenditure incurred in renovation and repairs and maintenance on the lease property is to be treated as revenue expenditure and accordingly the ground is allowed. Addition is deleted. bad debts which are written off as irrecoverable - 36(1)(vii) read with section 36(2)- if the amounts are written off in the books of account it is sufficient to allow the amount under the provisions of section 36(1)(vii) r.w.s. 36(2). - therefore, we are of the view that this issue can be re-examined by the A.O. and allow the amounts after due verification. Revised computation of income - the AO has no power to admit fresh claim otherwise than revised return but appellate authorities including CIT(A) and ITAT have power to admit such claim. Without prejudice to the above finding, we admit the assessee's claim which is in accordance with the judgment of the Apex Court in the case of Goetz India Ltd. (2006 -TMI - 5171 - SUPREME Court).In the interest of natural justice and keeping in view the ratio laid down by the Apex Court in the case of Goetze (India) Ltd. (2006 -TMI - 5171 - SUPREME Court), we remit the matter back to the file of the CIT(A) with a direction to decide the issue on merit in accordance with law after providing reasonable opportunity of hearing to both the sides."
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