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TMI Blog2015 (7) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... ute between the NDMC and the assessee. Thus, the liability of the assessee is towards STC and not to NDMC. As raising of demand, by STC and acceptance of liability amounting to ₹ 11,40,958/- by the assessee has not been disputed by the revenue. We are of the considered opinion that the impugned amount has accrued during the year under consideration and such amount was allowable as a deduction in the year under consideration. In this view of the matter, we do not find any infirmity in the order of Ld. CIT(A) on this issue and confirm the same. - Decided against revenue. Addition being amount deducted by the assessee from the sales account of Jaipur Branch - CIT(A) deleted the addition - Held that:- In the present case, the claim of the assessee is that the adjustment had been made on account of fluctuation in foreign exchange which was related to the export sales. However, neither the AO nor the ld. CIT(A) had mentioned in their respective order that the impugned amount relates to the foreign exchange fluctuation. In our opinion this issue requires a fresh examination at the level of the AO. We, therefore, set aside the impugned order and remand this limited issue to the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attached as per annexure. 5. The AO did not find merit in the submission of the assessee and made the addition of ₹ 3,79,958/-. 6. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted that forfeiture of Bank Guarantee was on account of short utilization of quotas extended for shipment of goods and merchandise, so it was a revenue expenditure and thus qualifies for deduction, being incurred in normal course of business. The ld. CIT(A) asked the remand report from the AO who vide report dated 02.03.2012 stated that the assessee had furnished evidence with respect to forfeiture of ₹ 3.80 lacs which was a sort of compensation for non-fulfillment/shortfall of certain conditions in export obligations. In view of the above submissions, the ld. CIT(A) held that forfeiture of the Bank Guarantee of ₹ 3,79,958/- was revenue in nature hence it was allowable. 7. Now the department is in appeal. The ld. DR supported the order of the AO and further submitted that the forfeiture of Bank Guarantee was penal in nature. Therefore, the AO rightly made the addition and the ld. CIT(A) was not justified in deleting the same. 8. In his rival subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity amounting to ₹ 11,40,958/- by the assessee has not been disputed by the revenue. We are of the considered opinion that the impugned amount has accrued during the year under consideration and such amount was allowable as a deduction in the year under consideration. In this view of the matter, we do not find any infirmity in the order of Ld. CIT(A) on this issue and confirm the same. 12. Since the facts for the year under consideration are similar to the facts involved in the aforesaid referred to cases. We, therefore, do not see any merit in this ground of the departmental appeal. 13. The last issue vide Ground No. 3 relates to the deletion of addition of ₹ 1,75,95,258/- made by the AO on account of amount deducted from the sales account. 14. Facts related to this issue in brief are that the AO during the course of assessment proceedings noticed that the assessee had debited the sales account of its Jaipur Branch under the head sales local silver . He asked the assessee to justify the sum of ₹ 1,75,95,258/- which was deducted in the sales account of its Jaipur Branch under the head sales local silver. The assessee submitted as under: On 31.03. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,65,01,557 Thus, the resultant income reported was ₹ 4,47,712/- as addition in our profits i.e. more income reported by correcting proforma currency rates mentioned in the invoices. 17. The ld. CIT(A) after considering the submissions of the assessee deleted the addition by observing as under: From the above submission filed by the assessee, it is clear that ACIT had wrongly taken sales adjusted at ₹ 1,75,95,258/- being debit in silver sales but had inadvertently missed to place attention on two credits in sales adjustment of ₹ 3,42,887/- on 2.2.2005 and ₹ 7,50,814 on 11.2.2005 sum totaling to ₹ 10,93,701. Thus net sales adjustment has been corrected to ₹ 1,65,01,557/- as report u/s 46A and again over looked by ACIT. Further the same bears a corresponding debit in purchases adjustment (Dr) to the tune of ₹ 1,69,49,269/- showing net increase of ₹ 4,47,712/- in profit report thereby making whole of additions of ₹ 1,75,95,258/- as uncalled for and unsupportive. Keeping in view of the above stated facts, the disallowance made by the Assessing Officer of ₹ 1,75,95,258/- on account of ded ..... X X X X Extracts X X X X X X X X Extracts X X X X
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