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TMI Blog2022 (6) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... arded, demolished or destroyed and the moneys payable in respect of such building, machinery, plant or furniture, as the case may be, together with the amount of scrap value, if any, exceeds the written down value, then so much of the excess as does not exceed the difference between the actual cost and the written down value shall be chargeable to income-tax as income of the business of the previous year in which the money is payable for the building, machinery, plant or furniture. Thus we do not find any substance or merit in the contentions of the Ld. A.R that the assessee s case is covered by the provision of Section 41(2) of the Act as the provisions of Section 41(2) deals with the charging of income in the year in which is sold, dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile computing the income of the assessee though the assessee has made the claim under the head sundry balance written off. In our considered view the mistake of the assessee would not disentitle it from a lawful expenditure. Accordingly, we upheld the order of Ld. CIT(A) by dismissing the grounds raised by the revenue. - I.T.A. No. 85/Kol/2019 - - - Dated:- 9-5-2022 - Shri Rajpal Yadav, Vice-President And Shri Rajesh Kumar, Accountant Member For the Appellant Shri Navratan M Bhansali, Advocate For the Respondent Shri Gourav Kanaujia, CIT(DR) ORDER Per Shri Rajesh Kumar, AM: This is an appeal preferred by the Revenue against the order of the Commissioner of Income Tax(Appeals)-4, Kolkata [hereinafter referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tting these assets valued from the Govt Approved Valuer, the losses towards impairment of assets were claimed in the profit and loss account in accordance with Accounting standard AS-28 issued by ICAI,. According to the AO the said loss is not allowable as there is no provision in the Act to allow any loss on account of impairment in the value of fixed assets unless the same are destroyed , discarded or sold and thus the claim of the assessee was rejected by the AO and corresponding addition was made to the income. 5. In the appellate proceedings, the Ld. CIT(A) by passing a very cryptic order allowed the claim of the assessee by referring to AS-28 which deals with the impairment of assets and allowed the appeal on this issue of loss on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax as income of the business of the previous year in which the money is payable for the building, machinery, plant or furniture. Thus we do not find any substance or merit in the contentions of the Ld. A.R that the assessee s case is covered by the provision of Section 41(2) of the Act as the provisions of Section 41(2) deals with the charging of income in the year in which is sold, discarded, demolished or destroyed, but not the case where the assessee continue to hold the fixed assets and loss or impairment in the value of asset is calculated on the registered valuer report. The case cited by the Ld. A.R. before us namely M/s Indowind Energy Ltd. vs. DCIT in ITA No. 938/MDS/2015 for AY 2011-12 dated 27.10.2016 is not applicable as the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck and stock of trims written off. The Ld. CIT(A) allowed the claim of the assessee by accepting the contentions that this is a mistake in the classification as the said written offs were made under the wrong head however undoubtedly represented the business loss and thus allowed the appeal of the assessee. 8. After hearing the rival parties and perusing the material on record, we find that during the year the assessee has written off the sum of Rs. 84,56,692/- on account of sundry balance written off which was charged to the account of profit and loss account. We note that the substantial part of the amount represented the stock written off in respect of garment stock and stock of trims and only a small portion of the total represented ..... X X X X Extracts X X X X X X X X Extracts X X X X
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