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TMI Blog2013 (2) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... books of accounts, it was thereafter not necessary any further to establish that bad debt had in fact become bad - in favour of assessee. Disallowance of loss on wind mills and change in the method of valuation of stock - ITAT deleted the addition - Held that:- As the assessee company in the annual report of the Board of Directors had noted that the Government was not coming out with long term policy for development of non-conventional energy sources which prompted the Company to reduce the energy devision during the year. The machines were also seized by the Bank having a first charge under the order of the Bombay High Court. Considering such aspects, finding that the title of the machines was also in doubt, the Company decided to writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in confirming the decision of CIT (A) in deleting the disallowance of Rs.3,61,22,730/- made on account of loss on wind mills and change in the method of valuation of stock? 2. Question No.1 pertains to claim of Rs.48.62 lacs made by the assessee towards loss for compensation paid to one Mekor Company. The Assessing Officer disallowed such claim. CIT(Appeals), however, reversed the findings of the Assessing Officer. On further appeal by the Revenue, the Tribunal remanded the issue for fresh consideration by the Assessing Officer. The Tribunal noted the assessee s contention that such claim was not initially made, but it was raised in the revised return filed on account of Mekor filing a suit before the Bombay High Court which was admitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fere. 4. With respect to question No.2, we notice that the assessee had claimed a sum of Rs.54.59 lacs by way of bad debts. The Assessing Officer disallowed such claim. CIT(Appeals) as well as the Tribunal reversed the view of the Assessing Officer. The Tribunal in particular, made following observations: We have considered rival submissions and perused the orders of the Assessing Officer and the CIT(A). We find that the debts pertained to non-trade parties have not been allowed by the CIT(A) as bad debts. It is not necessary to take any legal steps in order to justify the claim of the bad debts. The amount has been written off in the books of accounts of the assessee and this fact has not been disputed by the Revenue. The CIT(A) h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objection that the same was a capital loss was rejected observing that windmills were treated as stock in trade in the assessee s project. The Revenue s contention that the assessee had altered its method of valuation was also dealt with observing that the assessee found that windmill had no realizable value and therefore its valuation was changed to adopt to the cost or its realizable value whichever is less. Such method was found acceptable by different High Courts. Here also, the Tribunal having considered all relevant aspects of the matter and having come to the conclusion that the assessee was justified in writing off the investment in the windmills as bad debt. No question of law arises. In the result, Tax Appeal is dismissed. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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