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TMI Blog2012 (3) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... non-fulfillment of the contract for purchase of imported news print and the matter was very much subjudice before the Hon'ble Bombay High Court. He submitted that the assessee has not made this claim in its original return of income filed, as the company has not accepted this claim and the matter was subjudice. He submitted that in the revised return of income, the assessee has made a claim and a note was affixed with the return of income claiming that the assessee company was liable to pay compensation in respect of the suit filed by the "Mekor" against the assessee-company for non-fulfilment of contract for the purchase of news print. The learned CIT-DR submitted that in spite of filing of the revised return, the assessee has not debited the amount claimed by the "Mekor" in its books of accounts. He referred to the relevant paras of the assessment order in support of the case of the Revenue. He relied on the decision of the Hon'ble Gujarat High Court in the case of Alembic Chemical Works Ltd. Vs. DCIT, 266 ITR 47 and CIT Vs. Ashwin Vanaspati Industrial P. Ltd., 283 ITR 439. The learned counsel for the assessee has relied on the order of the CIT(A). In reply to a specific questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,000/-" 6. The learned CIT-DR relied on the order of the Assessing Officer. He referred to the relevant paragraphs of the assessment order in support of the case of the Revenue. He submitted that the detail of action taken by the assessee for recovery of the amount has not been filed by the assessee. He submitted that the onus is on the assessee that the debt was incurred during the course of the business and proper action was taken for recovery thereof and the loss incurred in the relevant period only. The learned counsel for the assessee submitted that now it is well settled law that when the assessee has written off debts in a particular year, the same has to be allowed as allowable deduction to the assessee. He submitted that all the bad debts allowed by the CIT(A) represented trade debts only and the amounts pertained to the payments which were not trade debts, have not been allowed by the CIT(A). 7. We have considered rival submissions and perused the orders of the Assessing Officer and the CIT(A). We find that the debts pertained to non-trade parties have not been allowed by the CIT(A) as bad debts. It is not necessary to take any legal steps in order to justify the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rat not coming out with any long term policy for development of non-conventional energy sources, especially wind energy, has prompted the company to hive off its energy division during the year. Regarding second objection of the Revenue that the loss was a capital loss, the learned counsel for the assessee submitted that the assessee is in the business of buying and selling of wind mills and it was very much "stockin- trade" and was shown as such, year after year. Regarding third objection of the correct method of valuation, the learned counsel for the assessee submitted that it is well settled that the valuation can be made on "cost or market price whichever is less". He submitted that the assesseecompany's title to the assets were defective and it was decided to write off the same and therefore the net realizable value was "NIL" and was declared accordingly. He relied on the decision of the Hon'ble Gujarat High Court in the case of Commissioner of Income-tax v. Ganga Charity Trust Fund, 162 ITR 612 and Echke Ltd. v. Commissioner of Income-tax, 310 ITR 44 in support of his submissions. 10. We have considered rival submissions and have perused the orders of the Assessing Officer a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of stock at cost or market value whichever is less is a universally accepted method as per the accounting standards and has been accepted by the Hon'ble Courts. Decisions cited by the learned counsel for the assessee support the case of the assessee. In these facts of the case, we hold that there is no mistake in the order of the CIT(A) in holding that such non-existing assets cannot be considered in the valuation of the stock of the assessee and the assessee has justifiably revalued the stock in terms of the method of valuation adopted by it in the year under consideration. The CIT(A) has recorded that it is not the case of the AO that the value shown by the assessee on the basis of net realisable value is not correct. In these facts of the case, we hold that the third objection of the Revenue regarding method of valuation is also not sustainable and there is no mistake in the order of the CIT(A) in deleting the addition made by the AO on this issue, and accordingly, the order of the CIT(A) on this issue is confirmed and the Ground No.3 of the Revenue's appeal is dismissed. CO No.148/Ahd/2007 (A.Y.2000-2001 : Assessee's CO) 12. The ground nos.1, 4 and 5 of the CO read as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. On a specific question from the Bench, the learned counsel for the assessee could not state that whether the sales under consideration were made in the subsequent years and have been entered in the books of accounts of the succeeding year or years. Consequent to the query put by the Bench, the learned counsel for the assessee submitted that the issue may be restored to the file of the AO for verification of the facts. He relied on the decision of the Hon'ble Gujarat High Court in the case of S. R. Koshti Vs Commissioner of Income-tax (Guj), 276 ITR 165. The learned DR has opposed the submissions of the learned counsel for the assessee. He referred to para-4 and 4.1 of the assessment order in support of the case of the Revenue. He relied on the decision of the Hon'ble Supreme Court in the case of Goetze (India) Pvt. Ltd. Vs. CIT, 284 ITR 323. 19. We have considered rival submissions and have perused the orders of the AO and the CIT(A). We find that the sale has taken place during the relevant period and the amount was credited in the books of accounts of the assessee. The assessee has filed its return of income on that basis alone. Even in the revised return of income fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd this ground of the Revenue's appeal is dismissed. ITA No.843/Ahd/2006 (A.Y.2000-2001) - Assessee's appeal 24. The only issue raised in this appeal is regarding imposition of penalty under Section 271(1)(c) of the Act. The learned counsel for the assessee submitted that the assessee has made a claim of statutory deduction under Section 24 and also depreciation. However, all the relevant facts were disclosed in the return of income filed by the assessee with department and it is a case of bona fide difference of opinion between the assessee and the department regarding the allowability of claim made by the assessee. He relied on the decision of the Hon'ble Apex Court in the case of CIT Vs. Reliance Petroproducts Pvt. Ltd., 322 ITR 158 wherein it is held that making of a claim of deduction does not amount to concealment of income. The learned CIT-DR has opposed the submissions of the learned counsel for the assessee. He referred to relevant para-2.3 of the appellate order passed by the CIT(A) in support of the case of the Revenue. He submitted that the assessee has claimed deduction for repair under Section 24 and also in the form of depreciation on the building. The learned cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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