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TMI Blog2016 (7) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... declaring total income at Rs. Nil. The assessment order u/s. 143(3) of the Act, was passed on 29. 12. 2006, determining the total income of the assessee at Rs. 3. 71 crores under normal provisions and at Rs. 26. 50 crores u/s. 115JB of the Act. ITA. 3532/M/2009: 2. The solitary Ground of appeal, raised by the AO, is about deleting the interest levied u/s. 234 B and 234C of the Act. While completing the assessment the AO had levied interests under the said sections of the Act. 2. 1. During the appellate proceeding the First Appellate Authority (FAA)held that interest u/s. 234B and 234C cannot be levied when tax was to be computed u/s. 115JB of the Act. He referred to the case of Kwality Biscuits Ltd. (284 ITR 434) of the Hon'ble Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 36(1)(viii) and held that deduction could be allowed only if the debts had become bad, that the assessee had failed to furnish any evidence about the debts becoming bad. Finally, he upheld the order of the AO. 3. 2. Before us, the AR stated that the amount in question represented the provisions for 'writing back of bad debts' and not 'writing off of bad debts, that the deduction was claimed in computation of income, that the amount written back was included under miscellaneous expenses and was debited to P&L account. The DR stated that matter could be decided on merits. 3. 3. We have heard the rival submissions and perused the material before us. We find that the AO and the FAA had lost sight of the basic fact that it was the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of issuing invoice and actual remittance received, that the FE loss was not on account of short recovery of export proceeds as held by the AO, that the AO had erroneously treated it as bad debts. After considering the submission of the assessee and the assessment order the FAA held that the AO had asked the assessee to submit details of FE loss, that no details were filed, that the assessee had submitted written reply during appellate proceedings, that no evidence was filed to substantiate the claim. Finally, he upheld the addition made by the AO. 4. 2. Before us, the AR contended that the assessee had submitted the note on foreign currency transaction at Schedule-15 to the notes on accounts , the details of freeing exchange loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not represent loss on sale of assets as inadvertently submitted during the course of assessment proceedings, that the loss on sale of assets amounting to Rs. 65, 817/- had been shown separately in Schedule-11 forming part of P&L A/c. of the compilation for the year ended 31. 3. 2004, that the amount had been disallowed and added back to the total income in the computation of income for the year under appeal, that the amount in question represented software expenses. The FAA observed that the assessee had not filed any evidence to substantiate its claim , that it had submitted additional evidences in form of Schedule No. 12 and 13, that assessee had not shown any reasonable cause for not filing said evidence before the AO. He, finally, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and could not be disallowed during the year, that the disallowance in earlier years for sales tax and excise was made, that the deduction could be claimed only on payment basis under section 43B of the Act, that the AO had ignored the note in Annexure-5 to the tax audit report with regard to sales tax amounting to Rs. 46. 64 lakhs, that the dispute amount did not represent liability created during the year under appeal, that provision for excise on gum assets was not created during the year under consideration, that the customer stockist provision account represented the amounts to be paid back to stockists, that it was a normal incident of the business and was a regular feature at every year end. The FAA held that the assessee had not pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puted had been discontinued. 7. 1. Before the FAA the assessee argued that the provisions for carry forward, set off of business losses were governed by section 72 and not by section 71(1)(i), that the proviso in connection with the continuance of business had been omitted by the Finance Act, 1999 w. e. f. 1. 4. 2000. After considering the submission of the assessee the FAA held that as per the proviso of Section 72 the unabsorbed losses that were discontinued could be set off against the profit and gains, if any, of that business, that the assessee had no business income for the year, that the AO had rightly disallowed the claim. 7. 2. The AR made the same submission that were advanced before FAA. He referred to memorandum explaining the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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