9911796707
TMI Blog2015 (3) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... efore also the claim is not allowable. - Decided against assessee. Disallowance of deduction for repairing of assets damaged due to floods - CIT(A) vacated the disallowance on the ground that the assessee had received financial assistance of 929 lakhs for repairing of its assets damaged due to flood and the assessee has claimed deduction of 353.90 lakhs on account of expenses incurred on repairs of flood damaged assets and the balance amount was shown as income in the year under consideration - Held that:- The fact that the assessee suffered loss has not been disputed by the AO, and therefore, the AO was not justified in disallowing the entire amount of loss claimed by the assessee, and thereby inferring that no actual loss was suffered by the assessee.However, we also find that the details of the expenditure incurred or loss suffered due to flood as well as Misc. write off of 82.93 lakhs was not filed before the CIT(A) or before us also by the assessee. The CIT(A) deleted the disallowance on the ground that the accounts of the assessee was audited by the C 1.75 crores. - Decided against revenue. Disallowance under Section 14A read with rule 8D - Held that:- It was mandatory for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived due to partly compensate the toss on account of the flood, as the income has been received during the year, the same is accounted and offered for taxation. Similarly during the year under review, the Company's claim amounting to ₹ 283.65 lacs (Rs.192.33 lacs + ₹ 91.27 lacs) regarding quality of coal supplied in past have been settled. Hence, the same has been offered for taxation during the year under review." From the above, it is seen that the assessee has not furnished any details and explanation about the expenditure of ₹ 3,53,90,000/- being loss due to flood, cyclone, fire. The assessee could not justify its claim on the basis of material evidences with respect to the particular assets and its extent. It also could not justify and did not make any submission as to why these expenses have been claimed under the head "extraordinary items". In view of the above, the asseessee's claim of ₹ 3,53,90,000/- under the head extra ordinary items cannot be allowed to it. Accordingly the same is disallowed and added back to its total income.- Without prejudice to the above, such claim in absence of details furnished, may be for the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to ₹ 929 lacs for this purpose. This is evident from the Government of Gujarat Resolution No GUV-1105-2724-K1 dated 4.7.2005 10.10.2005 and 13.10.2005 issued by the Principal Secretary, Energy & Petrochemicals Department. The assessee had incurred less expenditure than the subsidy received and the excess has been duly offered for taxation. Being an undertaking wholly owned by the Government of Gujarat, the accounts are to be audited by the auditors appointed by C & AG. As per the accounts furnished to C & AG, the expenses incurred on repair of "flood damaged" assets amounted to ₹ 353.90 lacs. The C & AG has certified the expenditure. No further evidence in this regard would ordinarily be necessary. If, however, it was felt that the expenses were over-state an independent enquiry could have been made to ascertain the correct expenses. However, this has not been done. Looking to the circumstances and also the fact that the excess subsidy received has been included in the taxable income, it is held that the AO was not justified in making the addition of ₹ 353.90 lacs, which is directed to be deleted." 7. For the Asstt.Year 2007-08, the CIT(A) decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lues percentage of shortages is very low. The main reasons for shortages are as under: - Weight difference - Difference is occurred due to change of mode of measurement i.e., material received in MT while issued as per no. of bags as well as in piecemeal etc. -Due to physical properties of material. - Transaction of breakable items damaged during handling. - Inter-changing of quantitative value at the time of issue due to same shape, size, etc. Accordingly, such losses on account of shortage, pilferage of stock is written off after approval of the competent authority. The appellant, therefore, prays that the additions made on this count may be deleted. " 6.4 I have considered the submissions of the Id. AR and the facts of the case. The amount written off consists of numerous items of small spares. In the business of the size of the appellant, keeping track of small consumable spares and stores with perfect accuracy is not always possible. At the time of annual stock taking, some items were found to be in excess of the number/quantity recorded in the stock register; whereas certain other items were found to be short in number/ quantity. The net effect is shortage of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the details of the expenditure incurred or loss suffered due to flood as well as Misc. write off of ₹ 82.93 lakhs was not filed before the CIT(A) or before us also by the assessee. The CIT(A) deleted the disallowance on the ground that the accounts of the assessee was audited by the C&AG and without verifying the details of loss and write off by the assessee. Thus, in our considered view orders of both the authorities below cannot be sustained. We, therefore, in the interest of justice remit the matter back to the file of the AO for adjudication of the issue afresh after allowing the assessee reasonable opportunity of producing the details of expenses incurred or loss suffered as well as details of amount write off and after verification of details so furnished and if the assessee fails to furnish the details, by estimating the reasonable amount of loss which was suffered by the assessee on account of flood and write off of the amount. Thus, this ground of the appeal for both the years under consideration is allowed for statistical purpose. 11. The ground no.2 for the Asstt.Year 2006-07 and Ground no.4 for the Asstt.Year 2007-08 are directed against the order of the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of repayment schedule, reduction in interest etc. over a long period of time which are in the range of more than..5 years. It means that the assessee will derive advantage of enduring nature as a result of restructuring of loans. Therefore, the expenses pertaining to the same in the form of premium for restructuring debts have resulted into advantage or benefit of enduring nature to the assessee. It is pertinent here to mention "enduring benefits" has been discussed as under- . . The Honorable Supreme Court has in case of ClT vs. Coal Shipments Pvt Ltd reported in 82ITR 902 has defined "Enduring benefit" in the following terms - Although and enduring benefit need not be of an everlasting character, it should not at the same time be transitory or ephemeral, so that it can be terminated at any time at the volition of either of the parties. What is the extent durability, or permanence should depend on the facts of each case. The expression "Enduring Advantage" is a relative term, not enduring in the sense of its being permanent, but is sufficiently durable depending upon the nature of terms upon which it can be acquired. . The above views were again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld depend on the facts of each case. The expression "Enduring Advantage" is a relative term, not enduring in the sense of its being permanent, but is sufficiently durable depending upon the nature of terms upon which it can be acquired. The above views were again expressed by the Honorable Supreme Court in the case of Devidas Vitthaldas & Co. Vs. CIT (1972) reported in 84 ITR 277. Therefore, having regard to that discussion and facts of the case as discussed above, the entire expenditure pertaining to CDR is held as capital expenditure. Accordingly, the total amount of ₹ 16,50,87,000/- as claimed by the assessee on this account and discussed above, is held as capital expenditure and the same is disallowed and added to its total income." 13. The CIT(A) in Asstt.Year 2006-07 deleted the addition by observing as under: "5. Ground No. 3.1 relates to the disallowance of ₹ 20,57,03,000/- being guarantee fees paid to Government of Gujarat in consideration of guaranteeing repayments of unsecured loans. The AO noted that the above mentioned sum had been paid to the Government of Gujarat. The AO called upon the assessee to show cause why the same should not be disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or process, and neither was the benefit "enduring", since the payment of guarantee commission was an annual charge. The benefit derived from payment of such commission thus lasted for exactly one year only. Such short lived benefit could not be categorized as "enduring". Hence, I am inclined to the view that the payment of guarantee commission was revenue expenditure. 5.3 Further, the jurisdictional Bench of ITAT had occasion to consider the allowability of guarantee commission paid to a Director of the company in respect of loans taken from the bank. In the case of Himalaya Machinery Pvt. Ltd. (ITA No. 738/Ahd/2009) for AY 2006-07, the Tribunal held, vide order dt. 5.6.2009, following the decision of the Rajasthan High Court in CITv Metalising Equipment Co. Pvt. Ltd, 8 DTR 12, that the payment of commission for guaranteeing repayment of loan was allowable as revenue expense. In the instant case, the loan has been guaranteed by the Government of Gujarat. Hence, quite apart from the other sound reasons for treating the expenditure as revenue, it would be unrealistic to say that the appellant company could derive any undue advantage or collateral benefit by making such p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is revenue are not eternal verities but must needs be flexible so as to respond to the changing economic realities of business. The expression "asset or an advantage of an enduring nature" was evolved to emphasize the element of a sufficient degree of durability appropriate to the context. " In my opinion, the laying out of these expenses does not confer any enduring benefit but merely facilitates the carrying out of business in more efficient manner. It has been held that where expenditure is incurred which results in saving of recurring revenue expenditure, such an expense would itself be a revenue item and not a capital item. In my opinion, the laying out of the impugned expenses did not confer any enduring benefit but merely facilitated the carrying on of business in a more efficient manner. Accordingly, it is held that the payment of ₹ 1,72,71,000/- on restructuring of loans was a revenue expense and therefore the disallowance of this amount is directed to be deleted." 14. For the asstt.year 2007-08, the CIT(A) has decided the issue by observing as under: "7.2 I have considered the submission. I find that vide order dtd.24-2-2010 in Appeal No.CAB-I/348 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid premium was paid for restructuring of the loans in order to reduce the interest burden. Thus the assessee has claimed expenses and also it has obtained several advantages as a result of restructuring of loans and in view of guarantee of, Gujarat Government for repayment of loan. In view of the facts, the assessee was asked to show cause as to why the premium for restructuring debts and the guarantee fees should not be disallowed as capital expenditure. In reply the assessee vide letter dated 8.8.2008 stated as under:- "The company raised loans from banks and financial institution and offered guarantee for, repayment of loan and interest thereon as security. Moreover, during the year under review, the assets and liability; of erstwhile Gujarat Electricity Board was transferred to the company, which also contained loans raised from banks and financial institutions. The guarantee fees are payable to the state government every year on the outstanding balance of guarantee given to banks / financial institutions on the first day of the year. Therefore, it is submitted that it is not a single one time payment but recurring expenditure till repayment of loans." The company has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow is that there are a number of tests for determining the nature of an expenditure, viz., test of bringing into existence an asset, test of enduring benefit, test of fixed and circulating capital, etc. However, the general view is that the test of enduring benefit is not a certain or conclusive test and it cannot be applied without regard to the particular facts and circumstances of each case. It has been generally agreed that where the laying out of such expenditure confers an advantage to the assessee which constitutes of merely facilitating the assessee's trading operations or enabling the management or conduct of the assessee's business to be carried on more efficiently or more profitably while leaving the fixed capital untouched, the expenditure would be in the revenue account even though the advantage may endure for the indefinite future. As observed by the Supreme Court in the case of Alembic Chemical Works Co. Ltd. v CIT, 111 ITR 377, "the idea of "once for all" payment and "enduring benefit" are not to be treated as something akin to statutory conditions; nor are the notions of "capital" or "revenue" a judicial fetish. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Asstt.Year 2006-07 and the ground no.1 of the appeal for the Asstt.Year 2007-08 are directed against the order of the CIT(A) in confirming the addition on account of Employee's PF contribution of ₹ 37.31 lakhs for Asstt.Year 2006-07 and ₹ 5.23 lakhs in Asstt.Year 2007-08. 27. In the Asstt.Year 2006-07, the CIT(A) has held as under: "7. Ground No. 4 relates to the disallowance of ₹ 37,31,520/- being employees contribution to PF on the ground that the same was paid beyond the due date. Details in this regard are-available at page-5 of the assessment order. 7.1 In appeal, it was submitted by the Id. AR that the delay was only of two days. The assessee explained during the course of appellate proceedings that the payments for the months of June and July were delayed due to heavy flooding in Gujarat State. In respect of the other defaults, it was explained that the assessee is a public company and there was no malafide intention or taking of any undue advantage by making the payment late by 2-3 days only. 7.2 I have considered the submissions of the ld. AR and the facts of the case. The Delhi High Court has held in the case of CIT v Aimil Ltd., ITA Nos 1063 of 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee failed to deposit the contribution with PF authority within the due date prescribed under the PF Act by invoking the provisions of section 36(1)(va) read with section 2(24)(x) of the Act. 30. On appeal, the CIT(A) following the decision of the Hon'ble Delhi High Court in the case of CIT Vs. Aimil Ltd. (supra) deleted the disallowance on the ground that deduction was allowable to the assessee if the contribution to PF account was deposited before the due date of filing of the return under section 139(1) of the Act. 31. The DR submitted before us that the issue is now covered in favour of the Revenue by the decision of the Hon'ble Gujarat High Court in the case of CIT Vs. Gujarat State Road Transport Corporation, 366 ITR 170 (Guj) wherein it was held that if the assessee has not credited the employee's contribution to the employees' account in the relevant fund or funds on or before the due date mentioned in Explanation to s. 36(1)(va), the assessee shall not be entitled to deductions of such amount in computing the income referred to in s. 28 of the Act. 32. On the other hand, the AR of the assessee submitted that the AO has disallowed the deduction simply because the payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility could be computed along scientific lines and on a scientific basis regularly from year to year, the provision towards the same could not be said to represent an unascertained liability. Here the assessee has got the computation done through LIC of India on a scientific basis, i.e. following acturial valuation principles. The ITAT, in the case of Etcher Motors Ltd v DCIT, 82 TTJ 61 has also held that provision for gratuity based on acturial valuation was not an unascertained liability which could be added back while computing book profit for the purposes of section 115JB. This view has been reiterated by the Mumbai Bench of the ITAT in Dresser Valve India Pvt. Ltd. v ACIT, ITA No. 6464/Mum/2007. Having regard to the above cited cases on this issue, it is held that the enhancement of the book profit by ₹ 3,68,000/- was not warranted. The AO is directed to recomputed the book profits without including the provision for gratuity. 36. In the Asstt.Year 2007-08 the CIT(A) decided the issue as under: "11. Ground No. 10(i) relates to the enhancement of Book profit under Section 115JB by the provision for gratuity amounting to ₹ 4,01,16,000/-, treating the same as unasce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purposes of section 115JB in terms of clause (i) of sec. 115JB (2), Explanation-l. The AO observed that the amount withdrawn from reserves could be reduced from the book profits only if the book profit of the year had been increased by such withdrawal. On examination of balance sheet it is found that the profit and loss account had not been increased by such amount. Accordingly, the AO denied the reduction of the impugned amount while computing profits u/s 115JB(2) of the Act. 8.2.1 In appeal, it was submitted by the Id. AR as under: "It is submitted that as a result of restructuring of erstwhile GEB, the expenditure/write offs arising on 1-4-2005 pertaining to the transferred undertakings under the transfer schemes were charged/adjusted during the year against the balance lying in the Profit & Loss Account under the head "Reserves & Surplus" in the Balance Sheet. It is submitted that the balance in the Profit & Loss Account shown under the head "Reserves & Surplus" is made of amounts transferred from the Taxable Book Profits of the previous years. Thus the equivalent amount of ₹ 8890.87 lacs transferred to the Profit & Loss Account -which is shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espective years in which the same was transferred to the Reserves. Out of the same Reserves, the company has withdrawn the amount during the year which are allowable as deduction while computing the bookprofits. The appellant, therefore, prays that the adjustment made on this count while calculating the bookprofits under section 115JB of the I T Act may be deleted." 8.2.2 I have considered the submissions of the Id. AR and the facts of the case. In the case of the appellant, the provisions contained in the main body of clause (i) of the Explanation- 1 would not be applicable since they relate to reserves credited before 1.4.96. Since the reserves in question were credited after 1.4.97, the proviso to the clause would be applicable. In terms of the proviso, the book profits would be allowed to be reduced to the extent of amount withdrawn from reserves only if the book profits 'such year' had been increased by those reserves out of which the said amount was withdrawn. In response to querry raised regarding the quantum of profits carried to reserves, the following table was furnished: STATEMENT SHOWING BALANCES TRANSFERRED TO RESERVES Particulars FY FY FY FY FY FY FY F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. On appeal, the CIT(A) allowed the appeal of the assessee by observing that the profit carried to the balance sheet in the reserve account were those profit, which were arrived at after deducting tax and that under the proviso it was not necessary that the amount withdrawn from the reserve should be credited to the profit & loss account of the same year. 45. DR supported the order on the AO, whereas the AR of the assessee relied o the order of the CIT(A). 46. In our considered opinion, as per Explanation-1 below section 115JB(2) clause (i) the profit as shown in the profit & loss account for the relevant previous year has to be reduced by the amount withdrawn from any reserve or provision, if any amount is credited to the profit & loss account. We find that a reading of the assessment order shows that the AO disallowed deduction claimed for amount withdrawn from reserves on the ground that the same was not credited in the profit & loss account of the year under consideration, and therefore, not included in the net profit as per the profit & loss account of the year. The CIT(A) deleted the addition without recording any finding whether the amount was included in the net profit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st accounts after unbundling of GEB, the amount of ₹ 1.30 crore was left to be unadjusted. Hence the learned Assessing Officer has made adjustment on account of such credit balance lying in the Capital Work in Progress. It is submitted that the said credit balance is being allocated and credited to the respective heads of accounts in the subsequent financial year and hence there is no question of reworking of depreciation for the year under consideration. It is submitted that the learned Assessing Officer has not at all understood the provisions of section 115JB of the Income Tax Act, 1961. The term "Book Profit" has been defined in the Explanation to section 115JA(2) of the Act to mean net profit as reflected in the P & L A/c of a company prepared for the relevant previous year, as drawn up as per parts I and III of Sch.VI to the Companies Act subject to certain adjustment by way of increase in respect of certain sums as referred to in clause (a) to (f) of the said Explanation and deduction in respect of certain sums as referred to in clause (i) to (ix) of the said Explanation. It is further submitted that rates of depreciation are not applicable to the Part II a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed power of making increases and reductions as provided for in the explanation to section 115J. The AO does not have the jurisdiction to go behind the net profits shown in the P&L A/c except to the extent provided in the explanation. The use of the •words "in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act" in section 115J was made for the limited purpose of empowering the AO to rely upon the authentic statement of accounts of the company. While so looking into the accounts of the company, the AO has to accept the authenticity of the accounts with reference to the provisions of the Companies Act, which obligate the company to maintain the accounts in a manner provided by the Act and the same to be scrutinized and certified by statutory auditors and approved by the company in general meeting and thereafter to be filed before the Registrar of Companies who has a statutory obligation also to examine and be satisfied that the accounts of the company are maintained in accordance with the requirements of the Companies Act. Sub-section (lA) of section 115J does not empower the AO to embark upon a fresh enquiry in regard to the entries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30 per cent depreciation required to be calculated under Schedule XIV of the Companies Act - Commissioner, acting under section 263, held that rate of depreciation claimed was in excess of the rate under the Companies Act and that excess was to be disallowed -Tribunal held that Circular of Company Law Board lays down minimum rate of depreciation for purpose of distribution of dividend and company may decide to claim higher depreciation on basis of a bona fide technological evaluation and proper disclosure is to be made by way of a note forming part of annual accounts - Tribunal further held that, in instant case, proper disclosure was made by way of a note to annual statement of accounts and rates claimed on basis of income-tax records were based on bonafide information of Board of Directors as contained in aforesaid minutes of meeting of Board of Directors -Whether Tribunal was right in holding that depreciation worked out by assessee on basis of income- tax records and debited to profit and loss account was not violative of provisions of Companies Act and in cancelling order passed by Commissioner under section 263 - Held, yes". The appellant also invites reference to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elies on the decision of ITATMumbai in case of Sterlite Industries (Ind.) Ltd. Vs. Addl. CIT, reported at 102 TTJ 53 wherein on exactly cases and following the Supreme Court judgement in case of Apollo Tyres Ltd. (Supra) it was held that while determining the 'book profit' under section 115J, the AO could not recomputed the profits in the P & A/c by excluding provisions made for arrears of depreciation. In view of the foregoing detailed discussion and law prevailing as per the judicial pronouncement, the matter is very clear that in case of difference in the rates of depreciation prescribed and those applied in preparing the Annual Accounts cannot be a reason to recomputed the net profit for the purpose of determining book profits under section 115JB of the IT Act. The appellant, therefore, prays that the adjustment made on this count while calculating the book profits under section 115JB of the I T Act may be deleted." Reliance was placed on the decisions of the Supreme Court in Apollo Tyres Ltd v CIT, 225 ITR 273 and of the jurisdictional High Court of Gujarat in DCIT v Vardhman Fabrics (P) Ltd., 122 Taxman 375. 8.3.2 I have considered the submissions of the Id. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty Act. The assessee has claimed the higher rates on the basis of a bona fide technological evaluation by the Ministry of Power, Government of India to the effect that depreciation in respect of plant and machinery utlised for generating power needed to be provided at higher rates. Hence the assesse has complied with the provisions of Schedule-VI of Companies Act while preparing its accounts. 8.3.3 The Supreme Court has held very clearly in Apollo (supra) as well as Malayala Manorama Co Ltd v CIT, 168 Taxman 471 that the power to make enhancement and reduction u/s 115J is limited only to the specific items provided under clauses (a) to (i) and (i) to (viii). The AO has only to satisfy himself that the provisions of the Companies Act have been complied with while preparing the accounts. The provisions of Income-tax Act with regard to depreciation etc., would not be material to the computation. On similar facts, the jurisdictional High Court of Gujarat in DCIT v Vardhman Fabrics (P) Ltd., 122 Taxman 375 had occasion to consider the Circular of the Company Law Board which clarified that the rates prescribed in Schedule XIV were minimum rates of depreciation and the company could clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he circular of the Company Law Board which clarified that the rates prescribed in Schedule XIV were minimum rate of depreciation and the company could claim higher depreciation on the basis of a bona fide technological evaluation and proper disclosure thereof in the notes forming part of annual accounts. 51. We find that it is not in dispute that the assessee has claimed only that depreciation which was debited in its audited profit & loss account which was laid before the AGM. In our considered view, following the decision of the Hon'ble Supreme Court in the case of Apollo Tyres Ltd. (supra) only those adjustments from net profit disclosed by such audited accounts can be made which are specified in Explanation to section 115JB. The depreciation not being a specified item in Explanation to section 115JB at the relevant time, we do not find any error in the order of the CIT(A), which is confirmed and therefore, the ground of the Revenue is dismissed. ITA No.1873/Ahd/2010 : Asstt.Year 2007-08 (Assessee's Appeal) 52. The ground no.1 of the appeal of the assessee is directed against the order of the CIT(A) confirming the addition of ₹ 1,13,55,000/- out of interest expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income in its computation of income. Hence, he disallowed ₹ 103.32 lakhs on account of interest expenditure and ₹ 10.26 lakhs on account of administrative expenses and made a total disallowance of ₹ 113.55 lakhs by invoking the provisions of section 14A of the Income Tax Act read with Rule 8D of the Income Tax Rules, 1962. 55. On appeal, the CIT(A) observed that the Hon'ble Gujarat High Court in the case of Gujarat Urja Vikas Nigam Ltd. (supra) following the decision in the case of Daga Capital Management Pvt. Ltd., held that it was mandatory for the AO to apply Rule 8D while computing the disallowance under section 14A of the Act. Therefore, he restored the matter to the file of the AO to verify the correct figure of interest and recalculate the disallowance, if necessary. 56. Before us, the AR of the assessee submitted that this Bench of the Tribunal in the case of DCIT Vs. Gujarat Urga Vikas Ltd., in ITA No.1820/Ahd/2010 order dated 30.9.2013 held that the Hon'ble Bombay High Court in the case of Godrej and Boyce, 328 ITR 81 (Bom) overruled the decision of the Special Bench in the case of ITO Vs. Daga Capital Management Pvt. Ltd., 117 ITD 169 (Mum)(SB) and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee could not be allowed the claim without such details. Moreover, loss on account of obsolescence could not be allowed after introduction of concept of depreciation on block of assets. As regards loss due to cyclone, fire and flood and sundry debits, no details have been furnished by the assessee despite requirements of this office. Without details assessee's claims cannot be allowed. In view of the above, the assessee's claim of ₹ 2,95,13,000/- under the head extra ordinary items is disallowed and added back to the total income." 59. On appeal the CIT(A) held as under: "6.5 With regard to the other sundry debits aggregating to ₹ 25.21 lacs, the assessee's explanation is that it was on account of deferred revenue expenditure written off during the year. The expenditure related to restoration of coal handling plant at Sikka, Dist. Jamanagar. 6.6 The amount written off represents l/5th of the expenditure incurred on restoration of the coal handling plant. The fact that the assessee has not claimed the entire expense in one year, clearly shows that the expenses were capital in nature. Accordingly, I hold that the A.O. has correctly disallowed the write off of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s ground of the appeal taken before him. He pointed out that from the ground of appeal taken before the CIT(A) this ground was taken as ground no.8 of the appeal filed before the CIT(A). 65. In view of above submissions of the AR of the assessee, we restore this issue to the file of the CIT(A) for adjudication of the same after allowing proper opportunity of hearing to the assessee. Thus, this ground of the appeal of the assessee is allowed for statistical purpose. 66. The ground no.4 of the assessee's appeal is directed against the order of the CIT(A) in confirming the enhancement of book profit computed under section 115JB of the IT Act by ₹ 1,13,55,000/- on account of disallowance made under section 14A of the IT Act. 67. The CIT(A) decided this issue as under: "13. Ground No. 11 relates to the enhancement of Book Profit by ₹ 1,13,55,000/- on account of disallowance made under Section 14A. This ground is consequential to the decision at ground no. 3 above. In ground no. 3, it has been held that the A.O. has rightly disallowed this amount as it is attributable to the earning of exempt income. This being the case, the provisions of clause (f) of Explanation-1 would ..... X X X X Extracts X X X X X X X X Extracts X X X X
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