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TMI Blog2018 (11) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... to the actual value realized by the assessee in respect of the DEPB on their sale which is something around 90% or less of their actual value. The statistics furnished by the assessee suggests that there is a basis for the assessee to estimate the realizable value of the DEPBs as against their actual value and inasmuch the DEPBs that fetched the highest price from Bajaj Overseas Impex was at 90%, we are convinced to believe that there is a scientific basis for the assessee to estimate the probable realizable value of the DEPB at 90%. Further in view of the Notification No. SO 69(E) dated 25.1.1996, it is permissible for the assessee to make provision for all known liabilities and losses even though the amount cannot be a certainty and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... none of these expenses would go to show the involvement of the personal expenses in this. In these circumstances, we are of the considered opinion, without pointing out to any particular discrepancy in the books of accounts of the assessee or without rejecting the books of accounts, such disallowance on estimate basis has no logic behind it and we find it difficult to sustain the same. - Decided in favour of assessee. - ITA No.2020/Del/2015 - - - Dated:- 23-8-2018 - Shri N.K. Billaiya, Accountant Member And Shri K. Narasimha Chary, Judicial Member For the Assessee : Shri N.K. Gupta For the Revenue : Sh. Ravi Kant Gupta, Sr. DR ORDER PER K. NARASIMHA CHARY, J.M. This is an appeal by the Assessee against the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t ₹ 19,76,33,120/-. In appeal, learned CIT(A) sustained the addition of ₹ 10,44,778/- on account of the value of DEPB license, deemed dividend and a sum of ₹ 25,500/ out of the telephone expenses for personal use by the employees , ₹ 10,48,368/- out of business promotion expenses and ₹ 44,000/- out of local conveyance on estimate basis. Though the assessee challenged in this appeal all the three additions, however, during the course of arguments, Ground No.2 relating to the deemed dividend is not pressed. Therefore, what remains to be adjudicated is the addition of ₹ 10,44,778/- on account of the value of DEPB license and the disallowance of the portion of the telephone expenses, business promotion expens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notified accounting standards. He further submits that the rule of consistency refers to the assumption that accounting policies are consistent from one party to another and well recognized by the Notification No. SO 69(E) dated 25.1.1996 issued by the Board under section 145 of the Act. 6. Learned DR submits that since the assessee was writing off the loss that was accrued on the sale of DEPB or the lapse of DEPBs at a subsequent point of time, in the same manner, in the year of accrual the assessee should have declared the actual value of DEPB as income and whenever their arises loss on either sale or the lapse, the assessee could have written off such loss in the year of such sale or lapse. 7. Having gone through the record an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to the assumption that accounting policy are consistent from one period to another. In view of this, we do not find anything irregular in the assessee declaring the realizable value of the DEPBs on their sale at 90% and to write off the losses arising on the sale or lapse of DEPBs in the subsequent years. With this view of the matter, we are inclined to accept the submissions made by the assessee and to direct the learned AO to delete the addition made on this score. 9. Now coming to Ground No.3 which relates to the ad hoc disallowance of the telephone expenses, travelling and conveyance expenses and export promotion expenses, learned AO recorded that there is an element of personal use by the directors and employees of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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