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2017 (7) TMI 1042 - ITAT DELHIBest judgment assessment - addition on account of fall in GP rate - Held that:- The closing stock of the assessee included two types of stock i.e. i) which had been sold up to the date of signing of audit report measuring 305287 metres and; ii) which was still unsold measuring 252864 metres. It has been contended by the Ld. AR that the Ld. CIT (A) applied the differential rate in valuation @Rs. 5/- per metre on the entire stock instead of the stock remaining unsold i.e. 2526784 metres. This contention of the assessee appears logical to us and we are of the considered opinion that the assessee should be allowed benefit of the same. Therefore, while rejecting the department’s grounds, we partly allow ground no. 1 of the assessee’s C.O. by restricting the addition to ₹ 15,26,435/- (305287 mtrs. x ₹ 5/-). Thus, ground no. 1 of the department’s appeal stands dismissed whereas ground no. 1 of the assessee’s C.O. stands allowed. Bad debts written off - Held that:- We find that the amounts have been shown as interest income receivable during earlier assessment years and as such, the assessee has already paid tax on the same. Therefore, for the purposes of section 36(2), the conditions laid down therein have duly been met by the assessee. Therefore, there is no reason as to why these amounts should not be allowed as bad debt. We accordingly set aside the order of the Ld. CIT(A) on this issue and direct the Assessing Officer to delete this addition of ₹ 18,18,058/- also. In the result, ground no.2 of the department’s appeal is dismissed and whereas ground no. 2 in assessee’s C.O. is allowed. Depreciation on boiler - boiler Falls under item no. 8(ix) under the head ‘energy saving devices’ in the chart prescribing the rates of depreciation under the Income Tax Rules - Held that:- CIT (A) has noted that it is an admitted fact that as per Certificate dated 8.12.2009 issued by supplier of the boiler and submitted before the Assessing Officer along with letter filed on 22.12.2009, the assessee had purchased Fluidized Bed Combustion Boiler which is specifically covered under item (ix) – Energy Saving Devices of the depreciation schedule under the heading (A)(a) as Ignifluid/Fluidised Bed Boilers eligible for depreciation @80%. In the proceedings before us, the department could not negate the fact that the boilers were in fact eligible for depreciation @80% and the only cause of grievance was that the assessee did not file a revised return. Considering the overall factual matrix, we are of the considered opinion that the Ld. CIT (A) has not committed any error in allowing depreciation at the correct rate even though the assessee had claimed depreciation at a lesser rate in the return filed. Therefore, we find no reason to interfere on this issue and we dismiss ground no. 3 of the department’s appeal. Disallowance on account of short term capital loss - Held that:- As already allowed depreciation on boiler @80% and the motor cars fall under different block of assets, although rate of depreciation is 15% as applicable to machinery and plant other than those covered by sub items (2), (3) and 8 below the table and sub item (2) being motor cars, other than those used in business of running them on hire. Consequently, the disallowance of short term capital loss of ₹ 1,48,76,639/- made by the AO is deleted as the block of plant and machineries other than motor car, computer and boiler ceased to exist. The AO is directed to withdraw depreciation of ₹ 13,22,785/- allowed in the order.
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