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TMI Blog2014 (5) TMI 467X X X X Extracts X X X X X X X X Extracts X X X X ..... not doubted the fact that assessee had to vacate the premises due to expiry of lease and closure of business - premises were to be vacated, the question of any portion of block of assets remaining with the assessee does not arise - the disallowance has been made after accepting the loss but on the ground that the claim of the assessee is capital in nature, therefore what is to be decided is whether the CIT(A) was correct in holding that the amount was allowable to the assessee in view of the clear provisions of sec. 32(1)(ii)/(iii). There was no infirmity in the order of CIT(A) - the claim of the assessee clearly falls within the scope of sec. 32(1)(iii) - The part of the amount realized by the assessee has been offered to tax - The bala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(1). Thereafter the assessment was reopened on a reason that 143(1) assessment had resulted in over assessment of loss of Rs. 71,12,659/-. 2.1. The assessee in its assets had a block of assets, WDV whereof amounted to Rs. 1,92,67,778/-. Due to expiry of the lease, assessee had to vacate the premises and close its business, therefore, the assets were put on sale and on certain items an amount of Rs. 60,15,800/- was realized and balance of Rs. 61,39,318/- was debited to P L A/c as loss on sale of assets. 2.2. Before assessing officer it was contended in this behalf that the balance amount was written off in P L A/c as the remaining assets were not being capable of sale and carried no realizable value, which was written off in the boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... block of assets, the assessee having been dispossessed of the assets its realizable value was nil and the difference was eligible to be claimed u/s 32(1)(iii). CIT(A) found favour with the explanation of the assessee and deleted the disallowance by following observations: 5.2. I find force in the submissions made by the assessee company in so far as the additions on account of assets written off are concerned. The Section 37 of the Act is general and residuary in nature for allowing all business expenditure provided not being of capital nature or expenditure of personal in nature and which does not fit into any other expenditures provided in other sections of the act. 5.3. I find from the schedule of fixed assets annexed with the B/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Electronics and Magnetic Ltd. Vs. DCIT 304 ITR 160; and that of Hon ble Kerala High court in the case of CIT Vs. Cooperative Wholesale Society 195 ITR 361. 4. Ld. Counsel for the assessee on the other hand contends that the ld. Assessing officer has not doubted the fact that assessee had to vacate the premises due to expiry of lease and closure of business. Assessing officer has accepted the loss albeit a capital loss ignoring the specific provision of sec. 32(1)(iii). Since premises were to be vacated, the question of any portion of block of assets remaining with the assessee does not arise. The statement that assessee had no asset in possession, has not been disputed by lower authorities. No where in the assessment order assessing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat ld. CIT(A) has rightly allowed the claim of the assessee in terms of clear provisions of law. The order of CIT(A) is relied upon. 5. We have heard rival contentions and perused the material available on record. We find no infirmity in the order of CIT(A) in as much as: (i) The claim of the assessee clearly falls within the scope of sec. 32(1)(iii). The part of the amount realized by the assessee has been offered to tax. The balance of the amount pertaining to the block had no realizable value, has not been disputed by the assessing officer. The difference is allowable u/s 32(1)(iii). (ii) Ld. Assessing officer has not doubted the genuineness of the claim and disallowed it only holding the loss to be capital in nature. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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