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TMI Blog2011 (10) TMI 692X X X X Extracts X X X X X X X X Extracts X X X X ..... -07. These appeals are directed against the orders of the Commissioner of Income tax(Appeals)-III at Chennai dated 12-3-2010, 25-3-2010 and 30-6-2010. The appeals arise out of the assessments completed under section 143(3) of the Income-tax Act, 1961. 2. First we will consider the appeal filed by the assessee for the assessment year 2005-06 in ITA No.794(Mds)/2010. 2.1. The first ground raised is that the Commissioner of Income-tax(Appeals) has erred in confirming the restriction of the claim of depreciation made by the assessee. It is the case of the assessee that the claim of higher depreciation has been made only towards the additions made to the leasehold building. 2.2. The very same issue was considered by the B-Bench of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Revenue fails in its appeal filed for the assessment year 2005-06 in ITA No.832(Mds)/2010. 4. Next we will consider the appeal filed by the assessee in ITA No.795(Mds)/2010 for the assessment year 2006-07. 4.1. The first ground raised by the assessee is that the Commissioner of Income-tax(Appeals) has erred in confirming the disallowance of non recoverable deposits written off to the extent of ₹ 21,74,342/-. The assessee has written off ₹ 21,74,342/- paid as earnest money deposit (EMD) to various institutions, mainly Government bodies. According to the assessee, the Government bodies have not returned the EMD to the assessee company even after the expiry of the contract, inspite of best efforts made by it. But the cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Incometax(Appeals) has erred in confirming the disallowance of conversion charges under section 40(a)(ia) as the assessee has not deducted tax at source on the relevant payments. 4.5. There is no doubt that the conversion charges are bound by TDS provisions. The assessee had not deducted any tax while making payments against conversion charges. Therefore, the assessee is hit by the provisions of law stated in section 40(a)(ia). The contention of the assessee that the recipients have accounted for the receipts and have already made payments of tax thereon, is not a good ground to absolve the assessee from its primary responsibility. The Commissioner of Income-tax(Appeals) has rightly confirmed the disallowance made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. before its winding up. It is also the case of the Revenue that the assessing authority has established in his order that the advances and deposits were not in fact irrecoverable. 5.3. In the previous year, relevant to the assessment year, the assessee had written off advances as non recoverable to the extent of ₹ 33,09,120/-, due from one of its group companies, M/s. Orient Laboratories Ltd. The said group company was also engaged in the business of pharmaceutical formulations. The assessee was distributing their products on consignment basis at an agreed rate of selling commission. An amount of ₹ 33,09,120/- was due from the group company against the above service. But M/s. Orient Laboratories Ltd. discontinued its bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not making payments to the assessee company as required by the agreement. Therefore, it is clear that during the lifetime of M/s.Orient Laboratories Ltd. the assessee has not made any efforts to collect the dues from M/s.Orient Laboratories Ltd. On the other hand, the assessee company continued to render services to its group concern, thereby increasing the volume of the amount due from that company. This conduct of the assessee company is not thrust upon it by anybody. The assessee has followed such a course of action by its own volition. Therefore, it is to be seen that this claim of deduction made by the assessee company does not have the necessary inevitable character. It is also to be seen that M/s. Orient Laboratories Ltd. was wound ..... X X X X Extracts X X X X X X X X Extracts X X X X
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