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TMI Blog2015 (8) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... cided against assessee. Disallowance of misuse charges - premises used for the purpose of business on the ground that the same is in the nature of penalty and does not relate to the year under appeal - Held that:- It was mandatory to pay the misuse charges due as on the date of exercising the option of owning the property from leasehold to freehold. In our opinion, the claim was not on account of bad debts, but towards the charges paid for regularization usage of building. The mere nomenclature in the books of account does not determine the allowability or otherwise of the claim and, therefore, considering the fact that the amount was paid under the policy announced by the Government itself, it does not amount to penalty for infraction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing. 2. The facts of the case are that the assessee filed the return of income for the Assessment Year 2004-05 on 29.10.2004, declaring loss of ₹ 25,93,937/-. After processing the return of income u/s 143(1) of the Act, the case was reopened u/s 147 of the Act by issuing notice u/s 148 and the assessment order came to be passed on 28.11.2011 u/s 143(3) r.w.s.147 of the Act at the total income of ₹ 2,30,770/-. In the return of income, the assessee had claimed ₹ 23,63,187/- written off debts, debited to P L account. In the notes to accounts, it is mentioned that the amount of ₹ 21.93,187/- deposited with L DO is written off because money will not be received back. The Assessing Officer framed an assessment 147/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of rented billing for commercial purposes as per the scheme announced by the DDA. On the other hand, Ld. DR submitted that the amount cannot be allowed as a deduction in as much as the amount was paid infraction of law and placed reliance in this regard on the decision of the Hon'ble Madras High Court in the case of Rane Brake Linings Ltd. reported in 115 Taxmann 367(Mad). 5. We heard the rival parties and perused the material available on record. At the first instance we shall deal with the grounds relating to challenge of reassessment proceedings. Admittedly, there was no scrutiny assessment. Hence, based on the information contained notes to account, the audit party pointed out to the Assessing Officer that impugned amount cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he High Court. The Govt. introduced conversion policy from leasehold to freehold in August 2003 and accordingly to take benefit of the policy appellant deemed it prudent to accept the decision and the amount of misuse charges paid ₹ 21,93,187/- were written off and included under bad debts. It was mandatory to pay the misuse charges due as on the date of exercising the option of owning the property from leasehold to freehold. In our opinion, the claim was not on account of bad debts, but towards the charges paid for regularization usage of building. The mere nomenclature in the books of account does not determine the allowability or otherwise of the claim and, therefore, considering the fact that the amount was paid under the policy a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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