9911796707
TMI Blog2013 (3) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... of expenses claimed in the profit and loss account considering them as expenses incurred for earning income from dividend. The learned CIT(A) further erred in enhancing the disallowance u/s. 14A by ₹ 8,80,646/- thereby effecting the total disallowance u/s. 14A of ₹ 11,17,182/-. The appellant prays that the disallowance u/s. 14A may kindly be deleted. 3) On the facts and circumstances of the case and in law, learned CIT(A) erred in confirming the action of the Assessing Officer in rejecting the appellant's claim to allow ₹ 1,26,77,568/- out of total leave encashment of ₹ 1,84,50,950/- being the disallowance made by the appellant while filing the return of income. The appellant prays that the same may kindly be allowed. Grounds for A.Y. 2006-07 1) On the facts and circumstances of the case and in law, learned CIT(A) erred in confirming the disallowance made by the Assessing Officer of a sum of ₹ 14,08,000/- u/s. 14A out of expenses claimed in the profit and loss account considering them as expenses incurred for earning exempt income from dividend. The appellant prays that the disallowance u/s. 14A may kindly be deleted. 2) On the facts and ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounting to ₹ 5,38,41,518/- is not assessable for A.Y. 2005-06. The Assessing Officer did not accept such contention of the assessee and the action of the Assessing Officer has been upheld by learned CIT(A). Similarly for A.Y. 2006-07, it was the grievance of the assessee that the Assessing Officer has failed to grant relief of ₹ 12,43,44,020/- on account of unutilized Modvat credit under the provisions of section 145A. It may be mentioned here that the ground regarding this addition in A.Y. 2006-07 has been claimed to be consequential to the same issue raised in A.Y. 2005-06. 5. At the outset, it was contention of learned AR that the assessee does not object the applicability of section 145A and also the inclusive method, the only objection of the assessee is that while computing valuation of purchase and sale of goods and inventories for the purpose of determining income chargeable under the head 'profits and gains of business or profession', the assessee may be granted two relief (i) the duty liability on the goods lying with the assessee as at the end of the year should be excluded from the value of inventories in accordance with the decision of Hon'ble Bomba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any taxes made before the due date of filing of return, the same is deductible u/s. 43B. We find substance in such claim of the assessee. We therefore hold that section 145A is applicable, the Assessing Officer will calculate the value of sale and purchase and inventory by including excise duty. It was the contention of learned AR that the Assessing Officer had already included excise duty in the earlier year in the value of inventory and therefore the opening stock for A.Y. 2005-06 already include the value of excise duty. This contention of the assessee shall be verified by the Assessing Officer and appropriate adjustment for the same is directed to be given. The Assessing Officer is also directed to give adjustment to the assessee of the excise duty portion of the inventory lying with the assessee, which has not moved from the premises of the assessee. The Assessing Officer is also directed to give deduction u/s. 43B on the component of the excise duty which is paid by the assessee before the due date of filing the return in respect of both the years. With these observations, we consider all these grounds partly allowed in the manner aforesaid. 9. Ground No. 2 for A.Y. 2005-06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn to claim such deduction. Learned CIT(A) has upheld the action of the Assessing Officer. 12. On these facts, it is the case of learned AR that according to the decision of Hon'ble Jurisdictional High Court in the case of CIT Vs. Pruthvi Brokers & Shareholders (P) Ltd. (252 CTR 151), such claim requires to be allowed as it has been held that claim for deduction not made in the return, the assessee is entitled to raise not merely additional legal submissions before the appellate authorities but is also entitled to raise additional claims before them and the appellate authorities have jurisdiction to deal not merely with additional grounds, which became available on account of change of circumstances or law, but with additional grounds which were available when the return was filed. Where learned CIT(A) and the Tribunal have found that there was inadvertent omissions to claim some deductions, the assessee ought not to be prejudiced and that the claim of the assessee should be admitted. 13. In this view of the situation, after hearing both the parties following aforementioned decision of Hon'ble Bombay High Court, we direct the Assessing Officer to verify the claim of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee has consistently been claiming depreciation @ 30% on such moulds and it has never been restricted to 25%. He pleaded that in view of the constancy, claim of the assessee should be accepted. Secondly, he pleaded that for A.Y. 2005-06, section 263 was invoked by learned CIT(A) on this very issue and the issue was considered by the Tribunal vide its order dated 23.12.2011 in ITA No. 2838/Mum/2010, wherein it was held that the view of the assessee was somehow supported by the aforementioned decision of Hon'ble Karnataka High Court and also by the decision of ITAT, Bangalore in the case of BPL Refrigeration Ltd. Vs. ACIT [272 ITR 47(AT)]. Thus it was held that the view taken by the Assessing Officer while allowing depreciation @ 30% was possible view and applying the ratio of Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. Vs. CIT (243 ITR 83), it was held that learned CIT(A) was wrong in invoking section 263. Thus, it was pleaded by learned AR there were judicial precedent in favour of the assessee. The claim of the assessee had never been disallowed and the Tribunal in its own case has held that this was one of the possible view. Thus, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1989, it is not necessary for the assessee to establish that the debts, in fact, have become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee. In this view of the situation, it was claimed by learned AR that the disallowance ought to have been deleted by learned CIT(A) and the same should be deleted.
20. On the other hand, learned Departmental Representative relied upon the assessment order and the order passed by learned CIT(A).
21. We have heard both the parties and their contentions have carefully been considered, aforementioned decision supports the case of the assessee. The only reason given by the Assessing Officer is that the assessee could recover these debts if it had made necessary efforts. The same cannot be the ground to disallow the claim of the assessee as the bad debts have been written off in the books of account. Therefore, we direct the Assessing Officer to allow such claim of the assessee and this ground of the assessee is allowed.
22. In the result, both these appeals are considered to be partly allowed in the manner aforesaid.
Order pronounced in the open court on 13.3.2013. X X X X Extracts X X X X X X X X Extracts X X X X
|
