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2014 (10) TMI 734 - AT - Income TaxAdvances written off disallowed – Held that:- While AO has disallowed the amount for the reason that they are not in the nature of advance, CIT(A) has sustained the assessee’s claim n the ground that no evidence has been produced by assessee to substantiate that party has refused to repay advance given by assessee and further the said party has refused to supply the pouches for their changed design - So far as the rent deposits are concerned, CIT(A) sustained the disallowance by simply observing that assessee has failed to produce any evidence that landlords have refused to repay the deposits - the conclusion drawn by AO as well as CIT(A) are not correct as it is not in accordance with the statutory provision - As per Section 36(1)(vii) if the debt becomes bad and had actually been written off in the books of account, then, it is to be allowed as a deduction - the amount has been written off in the books of account of assessee - deduction claimed cannot be disallowed only on the reason that assessee has not proved that the persons concerned have refused to make payment to assessee – the addition is to be set aside – Decided in favour of assessee. Nature of expenses towards payment of preemption charges to VSNL for surrender of transponders disallowed – Held that:- Assessee has taken on lease from VSNL 5 numbers of transponders for telecasting its programmes in the channels - the preemption charges of ₹ 4,70,27,466 equivalent to US $ 10,33,000 was towards premature termination of lease in respect of two transponders of VSNL, which were used by assessee as assets of its business - the expenditure incurred by assessee being connected with an asset which is used as a tool for carrying on the business of assessee, certainly, in the nature of capital expenditure – relying upon Aztec Software and Technology Services Ltd. Vs. ACIT [2007 (7) TMI 50 - ITAT BANGALORE] - the expenditure incurred is connected to apparatus with which assessee carried on its business, the nature of expenditure is also capital – thus, the order of the CIT(A) is upheld – Decided against assessee. Depreciation on computer peripherals @ 60% - Held that:- CIT (A) has restricted the depreciation to 25% on modems, switches, routers, printers, scanners etc by treating them as plant and machinery – as decided in assessee’s own case for the earlier assessment year, it has been held that the revenue authorities have not disputed the fact that the items on which the assessee has claimed depreciation at the rate of 60% by treating them as ‘computer’ are being used as input or output device of the computers - relying upon DCIT vs. Datacraft India Limited [2010 (7) TMI 642 - ITAT, MUMBAI] - any device when they are used along with computer and when their functions are integrated with the computer comes within the ambit of the expression ‘computer’ - depreciation at the rate of 60% by treating the screen, key board, mouse, UPS, net working, router as part of the computer system and thereby eligible for depreciation at the rate of 60% as available to computer – thus, the contention of the assessee is accepted that it is entitled to avail depreciation at the rate of 60% on those items as is applicable to ‘computer’ – thus, the AO is directed to allow depreciation @ 60% as claimed by assessee – Decided in favour of assessee.
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