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TMI Blog2018 (2) TMI 1359X X X X Extracts X X X X X X X X Extracts X X X X ..... ified during the assessment, nor during remand proceeding. 2. Whether on the acts and n the circumstances of the case, the Ld. CIT(A) erred in allowing an amount of Rs. 21,16,819/- calling it late delivery charge and which had failed to pass the verification made by the AO. 3. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) erred in holding the los claimed upon the disposal of fixed assets as revenue loss especially where there was no option available to the assessee company not to claim no depreciation on the asset. 4. The Revenue shall always crave for adding or altering any ground on or before the date of hearing." 3. First issue raised by Revenue in ground No. 1 is that Ld. CIT erred in deleting the addition made by the Assessing Officer for Rs.37,66,311/- under the head "Commission" on account of non-confirmation from the parties. 4. Briefly stated facts are that assessee is a private limited company and in the year under consideration has incurred an expenditure of Rs.78,37,313/- under the head " commission" which was paid to six parties as detailed under:- Sl.No. Name of the party PAN No. Commission amount 1. Alliance Engineeri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AEMS was maintaining its accounts on cash basis. At the stage of remand proceedings, AO did not provide opportunity to assessee to file the copies of accounts, copy of return, profit and loss account and balance-sheet of AEMS. Ld. CIT(A) after considering the submission of assessee and remand report deleted the addition made by AO by observing as under:- "4.1 With regard to disallowance of Rs. 37,66,311 paid to M/s Alliance Engineering & Marketing Services, Proprietor Satish Chawla, it is seen that part of the commission pad is reflected in the return of income of Sri Satish Chawla and balance is reconciled as being difference due to system of accounting followed by ape and recipient. The fact of no response on late response in compliance of notice u/s. 133(6) cannot be the basis of disallowance when the receipt is reflected in return of income of recipient. The payment of commission is made after deduction of income tax and charging of service tax. The commission was paid for sales promotion and is linked to sales effected by commission agent. The AO is directed to delete this addition." The Revenue, being aggrieved, is in appeal before us. 6. Ld. DR before us submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of commission expense incurred by assessee vis-à-vis commission income booked by AEMS which is placed on page 119 of the paper book. It was also explained that AEMS is maintaining its accounts on the basis of cash system of accounting and reconciliation statement furnished by assessee, which reads as under:- ASSOCIATED TOOLINGS INDIA PVT. LTD. RECONCILIATION OF PAID / PAYABLE BETWEEN ASSOCAITED TOOLINGS & ALLAIANE ENGS. 7 MARKETING SERVIES FOR THE YEAER ENDING 31ST MARCH' 2009 TOTAL IINVOICE VALUE 3766311.00 LESS: OUTSTANING INV.AMOUNT AS ON 31/03/09 1386300.00 2380011.00 ADD: PAYMENT MADE DURING THE YEAR BILLS OF A/Y 07-08 449260.00 INVOICE AMT. PAID DURING THE YEAR 2829271.00 LESS: CHEQUE ISSUED DATED 17/03/09 ACCOUNTED BY PAYEE DURING THE F/y 09-10 202542.00 2626729.00 ADD: EXCESS PAID DURING THE YEAR 702.00 AMOUNT AS PER PAYEES ACCOUNT 2627431.00 After considering the totality of the facts, we observe that all the necessary details as discussed above were filed by assessee in the course of assessment proceedings as well as remand proceedings but no defect of whatsoever has been pointed out by AO. It was also pertinent to note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore, the parties released the payments to assessee after deducting the late delivery charges. As such, no payment of whatsoever was made on account of late delivery charges as claimed by AO in his assessment order. In fact assessee failed to deliver the goods on time to the parties due to nonavailability of raw materials. Thus, the delay occurred which resulted losses to the assessee in the form of late delivery charges deducted by the concerned parties. 10.1 The assessee in support of its claim also produced the copies of the purchase orders on sample basis wherein the date of delivery of the goods was specified which is placed on pages 80 to 91 of the paper book. Similarly, the assessee also produced the details of the payment made by the parties, wherein the amount of late delivery charges was deducted. The copy of sales made by the assessee and the amount of late delivery charges deducted by the parties are placed on pages 93 to 102 of the paper book. The AO during the course of remand proceedings did not ask for the party-wise details who have deducted late delivery charges from such payments. Therefore, the observation of AO in the remand report that party-wise detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by assessee. We also further note that the necessary details in connection with late delivery charges was duly furnished before Authorities Below as discussed above. But AO in remand proceedings has not pointed out any defect in the submission made by assessee. The AO in remand proceedings has taken the stand that party-wise detail of late delivery charges was not filed by assessee, without point out any defect on the submissions filed by assessee before him. As the AO has not pointed out any defect in the submission made by the assessee at the time of assessment proceedings as well as remand proceedings, we feel that addition has been made by AO on his surmise and conjecture. Further, we also find that assessee has furnished details of invoice against which late delivery charges was deducted and which are placed on pages 92 to 102 of the paper book. In this regard, Ld. DR before us has not pointed out any defect in the finding of Ld. CIT(A). In this view of the matter, we do not find any reason to interfere in the order of Ld. CIT. We hold accordingly. The ground raised by Revenue is dismissed. 13. Next issue raise raised by Revenue in ground No.3 is that Ld. CIT(A) erred in d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other business or commercial right of similar nature, being intangible assets acquired on or after the 1st day of April, 1998, owned wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall be allowed - (i) ... (ii) In the case of any block of assets, such percentage on the written down value thereof as maybe prescribed. (iii) In the case of any building, machinery, plant or furniture in respect of which depreciation is claimed and allowed under clause (i) and which is sold, discarded, demolished or destroyed in the previous year (other that the previous year in which it is first brought into use), the amount by which the moneys payable in respect of such building, machinery, plant or furniture, together with the amount of scrap value, if any, fall short of the written down value thereof " From the above provision, we find that a block of asset can be reduced only in the event of sale, discarded demolished or destroy in the previous year. In the instant case, the deduction was claimed on account of loss of asset which is not appearing under the provision of Section 32(1)(iii) of the Act. Therefore, in our c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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