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TMI Blog2012 (11) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... s erred in deleting the addition of Rs.4,00,000/- made on account of disallowance of guarantee commission. 2.1. The issue of "Guarantee Commission" paid to the Directors has already been considered in assessee's own case by the Respected Co-ordinate Bench "D" ITAT Ahmedabad in ITA No.738/Ahd/2009 for A.Y. 2006-07, dated 05/06/2009, wherein vide paragraph No.6 it was held as under:- "6. We find that the issue is squarely covered in favour of the assessee and against the Revenue by the decision of Hon'ble Rajasthan High Court in the case of Metalizing Equipment Co.(P) Ltd. (supra) and in the present case also the facts are exactly identical as the directors have been paid guarantee commission to compensate them from the risk assumed by them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness of the assessee. Since in assessee's own case on last two occasions the Respected Coordinate Benches have taken a consistent view in assessee's favour, therefore in the light of the ratio laid down therein for this year as well considering the facts as noted by the lower authorities, we hereby affirm the view taken by ld.CIT(A) and dismiss this ground of the Revenue. 4. Ground Nos.3 & 5 read as under:- Ground No.3 3. On the facts and in the circumstances of the case and in law, the ld. CIT(Appeals) erred in deleting the addition of Rs.15,06,472/- made on account of disallowances of expenditure on after sales operation and maintenance. Ground No.5 5. On the facts and in the circumstances of the case and in law, the ld. CIT(Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... including compensation for any deficiency, the liability would be in the nature of revenue expenditure, and if estimated on some scientific basis, it has to be allowed as deduction in view of the, Supreme Court decision in the case of Bharat Earth Movers Vs. CIT, 245 ITR 428 (SC) wherein the court observed that if a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should also be capable of being estimated with reasonable certainly though the actual quantification may not be possible. In such circumstances, in the opinion .of their Lordship, such liabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as per the recurrence of the after sales obligation the amount was debited to P&L Account, therefore in the like manner for the year under consideration, we hereby consider it proper to affirm the factual as also legal finding of ld.CIT(A). These two grounds of the Revenue are therefore dismissed. 5. Ground No.4 reads as under:- 4. On the facts and in the circumstances of the case and in law, the ld.CIT(Appeals) erred in deleting the addition of Rs.24,52,215/- made on account of disallowances of interest on inter-corporate deposits. 5.1. It was noted by the A.O. that the assessee had given inter-corporate deposit of Rs.63 lacs, however no interest was shown. The explanation of the assessee was that the borrower companies have failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Godhra Electric 225 ITR 746 (SC). 9. We have considered the arguments of both the sides and also carefully perused the orders of the authorities below in the light of the compilation filed and case laws cited. There is no dispute that the assessee has advanced ICD of Rs.63 lacs. In this regard, facts have revealed that a sum of Rs.50 lacs was advanced to M/s.Indu Nishan Oxo Chemicals Ltd. on an interest @ 21%, stated to be advanced on 22.5.1998. There is nothing on record that the said company had gone under liquidation or why the said amount was treated by the assessee as non-recoverable. For every prudent business-man such a huge amount has substantial value, therefore definitely takes all possible effort for the recovery of the same. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of accounting, then he is under obligation to disclose the interest income on accrual basis. Whether the income was "real income" or not has to be decided on the basis of the examination of the facts. Only having regard to the facts and circumstances of the case, it can be ascertained whether the assessee is correctly applying the concept of "real income". Rather, the Hon'ble Calcutta High Court in the case of Balarampur Commercial Enterprise 262 ITR 439, as referred in one of the written submissions of the assessee, has opined that, quote "But it was to be seen whether having regard to the facts and circumstances of the case, the assessee is abusing or misusing the concept of real income or not". unquote. Even in the case of Iqbal Chand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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