2011 (6) TMI 1029 - AT - Income Tax

Summary

Issues involved: Appeal against addition of rural electrification subsidy wrongly claimed and written off.

Facts: The assessee-Board filed its return of income showing a total loss. Assessment u/s 143(3) was completed, adding the amount of subsidy written off by the assessee as irrecoverable.

Key Points: The assessee-Board was entitled to rural electrification subsidy, but the claim was found to be irrecoverable. The decision to write off the amount was made before the finalization of accounts for the year under appeal.

AO's Decision: The AO declined the claim as premature, stating that the decision to write off the amount was made after the relevant period. The CIT(A) concurred with this view.

Tribunal's Analysis: The Tribunal found that all conditions for writing off the amount were satisfied. The decision to write off was an acknowledgment of the irrecoverability of the sum, even though the formal resolution was passed after the relevant period.

Conclusion: The appeal was allowed as the Tribunal considered the decision to write off the amount as valid, given the irrecoverable nature of the subsidy. The timing of the decision did not invalidate the claim.

Judges: D.K. Srivastava, Accountant Member and Sushma Chowla, Judicial Member.