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2015 (11) TMI 1852 - ITAT JODHPURDisallowance u/s 43B - payment of privilege fees - said payment was application of income or appropriation of profit and also the fact that these expenses are a capital nature - HELD THAT:- As decided in own case [2013 (9) TMI 557 - ITAT JAIPUR] appellant company was granted exclusive privilege for wholesale trade of Indian Made Foreign Liquor & Beer in the State of Rajasthan for the financial year 2006-07 under the provisions of the Rajasthan Excise Act, 1950 by competent authority under the said Act. In exercise of its powers under section 30 and 42(c) of the Rajasthan Excise Act, 1950, the competent authority under the said Act has levied a privilege fees for FY 2006-07 vide its order No. F. 4(5)FD/Ex/2005 dated 28.3.2007 upon the appellant company in lieu of granting the said privilege. In view of these facts and following the order of Hon'ble Tribunal, Jaipur for AY 2006-07, we direct the AO to delete the addition Addition prior period expenses - HELD THAT:- During the course of appellate proceedings, the appellant submitted that in respect of prior period items shown in the Profit & Loss account, it is the position of the assessee that if the net result of prior period items is positive, the same is duly offered as income in the respective years and if the net result is in negative, the same has been claimed in the respective years and the said policy has been consistently followed by the appellant over the years - it is noted that while allowing relief to the assessee, the ld. CIT (A) has also taken into consideration the supporting documents which have been filed by the appellant before the AO towards the claim of these expenses. In the light of above, we do not feel that there is need to interfere in the finding of ld. CIT (A) and hence this ground of Revenue is also dismissed. Delayed /depositing the PF/ESI payment the prescribed time - HELD THAT:- Bench has been taking a consistent position that where the contributions of PF/ESI has been deposited before the due date of filing of the return of income, the same should be duly allowed in the hands of the appellant and the said position shall apply both in respect of employees' contribution as well as the employer's contribution. In the light of above and following the Hon'ble Supreme Court decision in the case of CIT v. Vinay Cement [2007 (3) TMI 346 - SC ORDER] this ground of the Revenue is dismissed. Addition of debit balances of suppliers which remained outstanding and which have been written off in the books of account of the appellant - HELD THAT:- During the appellate proceedings before the ld. CIT (A), the assessee submitted that the assessee has given the advances to suppliers for business purposes only but liquor was not received. CIT (A) followed the Hon'ble Supreme Court decision in T.R.F. Ltd. v. CIT, [2010 (2) TMI 211 - SUPREME COURT] wherein it has been held that if the bad debt is written off as not recoverable in the accounts of the assessee, it has to be allowed. In the instant case it is not in dispute that this debit balances have been actually written off in the books of accounts of the appellant. Accordingly we find no infirmity in the order of ld. CIT (A) who has deleted the said addition following the decision of Hon'ble Supreme Court in the case of T.R.F. Ltd., hence this ground of Revenue is dismissed. Disallowance u/s 43B - HELD THAT:- We agree with the contention of the appellant and delete the disallowance which was not claimed by the appellant at first place. Hence the question of disallowance does not arise. Similarly, regarding the disallowance towards surcharge on excise duty, the submission of the appellant is that the same represents the closing provision as on 31.3.2009 and during the year, no amount was charged to the Profit & Loss account. In the light of above, the disallowance is also deleted in the hands of the appellant. Hence, the ground no. 1 of assessee is allowed. Disallowance of un-reconciled bank balance for the period 2005-06 which was written off by the assessee in its books of account - HELD THAT:- It is not disputed that the management took a conscious decision to write off its balances maintained with the bank which were not getting reconciled for a long period of time. So where the balances maintained with the bank which belong to the assessee are written off in the books of account, the assessee has to charge the same as an expense/loss in the Profit & Loss account. We do not understand how the same would have been reported as Income in the hands of the appellant. In any case the assessee has submitted that if in future it is able to recover these bank balances, it will offer the same for tax. We do not believe the revenue is at a loss by such claim and submission of the appellant. In the light of above, the disallowance made by the A.O. is deleted and necessary relief is granted to the assessee. Hence, this ground of assessee is allowed.
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