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TMI Blog2015 (12) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... ture involved. The latter precedent holds that when purpose of the repair in question is of preserving or maintaining already existing asset, it would amount to corrent repair only. There is no such ratio propounded that as and when a repair exceeds 20% of the WDV, the same would need to be capitalized. The Revenue fails to justify the Assessing Officer’s view abovesaid. - Decided against revenue Bad debts disallowance - CIT(A) deleted the addition - Held that:- The case file reveals that the assessee maintained two accounts under the heads security ledger deposits and a running one. Its former sum of security deposits could not be recovered despite exercising all civil and penal remedies (supra). The same proves non-recoverability there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... talized. He sought to disallow the same. The assessee inter alia pleaded the impugned sum to have been incurred as normal repair of various machineries, enclosed bills demonstrating purchase of major items as bearings, machinery plant, ball screw etc. The Assessing Officer went by his earlier reasoning for disallowing/adding assessee s claim in assessment order. 3. The CIT(A) has accepted assessee s corresponding ground as follow:- 3.1 This is regarding disallowance of ₹ 6,51,333/- being machinery repair expenses. In the assessment order the AO has stated that the assessee has claimed this expenditure as machinery repair expenses. It was noticed that the assessee had made a claim of plant and machinery repairs, which needed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perused through the ledger account of machinery maintenance almost all the expenses are in respect of oil, diesel, kerosene, bearings and various other machine parts of small small amount. The only expenditure, which is more than ₹ 25,000/- is on ball screw part of the CNC machine amounted to ₹ 1,50,277/-. Other bigger expenses are on bearings, which items are clearly consumables and machine cover. None of these items are capital items, which can be capitalized. All these expenses are for running the machinery and therefore for the current repairs. The decision relied upon by the A.O. are not applicable on these facts. The disallowance made by the AO is deleted and this ground of appeal is allowed. 4. We have heard both th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has claimed these bad debts by writing off the same in the books of accounts, which is due from the central projects and development organization. The assessee has stated that these are irrecoverable and has therefore claimed the bad debt. The AO disallowed the claim saying that the total amount due from central project and allotment organization is ₹ 83,80,132/- but the assessee has written off only part amount of ₹ 24,80,126/-. The AO stated that as the entire amount has not been written off as bad debt the claim cannot be allowed. The AO also stated that the assessee is not proved that the debt has become bad. 4.2 During the appellate proceeding the appellant has stated that there is no requirement that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lice station. The appellant has relied on the decision of Gujarat High Court in the case of Girish Bhagwatprasad. 256 ITR 772 and the decision of Delhi High Court in the case of Morgan Securities Credits Private Ltd. 292 ITR 339 as well as the decision of Gujarat High Court in the case of Patidar Ginning Pressing Company 157 ITR 177. The appellant also relied on the decision of Allahabad High Court in the case of Jawalaprasad Radhakishan 79 ITR 530. The appellant has also relied on the decision of ITAT Ahmedabad in the case of Parlight Securities Ltd. (2010) 3 ITR (Trib) 628 dated 05/02/2010 wherein irrecoverable deposits made with the Kolkata stock exchange was allowed as deduction as business loss. 4.3 I have considered the subm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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