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2020 (10) TMI 990 - ITAT AHMEDABADDisallowance of depreciation - Depreciation on opening written down value - HELD THAT:- Information cannot be relied upon to decide the issue in hand in the absence of primary documents as highlighted by the authorities below. Assessee failed to file any documentary evidence reflecting the sales made by it through the Manufacturing activity viz a viz the trading activity separately which was essential to establish the fact that assessee has carried out the manufacturing activity in the year under consideration. Assessee has claimed depreciation in the year under consideration in the opening written down value and addition of fixed assets put together which was disallowed by the CIT (A) - depreciation claimed by the assessee in the opening written down value cannot be denied in the year under consideration as it pertains on the fixed assets which were acquired in the earlier years and the depreciation was allowed thereon - we direct the AO to allow the depreciation on such opening written down value of the assets brought forward from the earlier assessment year. Hence, the ground of appeal of the assessee is partly allowed. Disallowance on account of damage and wastage of goods - HELD THAT:- Assessee by claiming the bad debts is not under the obligation to prove the ir-recoverability of the amount from the parties. Assessee chooses to write off such amount as the damaged goods which is also supported by the ledger copy of the other party. Thus,in the present situation, what we try to infer is that claim of the assessee cannot be treated as bogus.Authorities below have not verified from the concern parties whether the claim made by the assessee is not tenable by issuing notice under Section 133(6)/131 of the Act. Similar claim of the assessee was admitted by the Revenue for immediate preceding assessment year as discussed above, therefore, the same claim in the year under consideration, though high in value, cannot be rejected without any cogent materials - we are not impressed with the finding of the authorities below in the manner in which they have rejected the claim of the assessee. Accordingly, we set aside the finding of CIT (A) and direct the AO to delete the addition made by him. Hence, the ground of appeal of the assessee is allowed. Disallowance of the expenses on account of business promotion expenses - HELD THAT:- Whether the Circular No.5/2012 issued by CBDT is applicable retrospectively or prospectively. In this regard we note that the relevant assessment year under consideration is A.Y. 2008-09 during which there was no CBDT Circular as referred by the authorities below for making disallowance by branding the expenditure as covered by Explanation to Section 37(1) - We found that the expenditures were incurred wholly and exclusively for the purpose of business, therefore, same cannot be disallowed by applying CBDT Circular dated 01-08-2012 in respect of years under consideration. In the case of Troikaa Pharmaceuticals Limited vs. DCIT [2019 (10) TMI 731 - ITAT AHMEDABAD] involving identical facts and circumstances has decided the issue in favour of the assessee. Hence, the ground of appeal of the assessee is allowed. Disallowance of foreign travelling expenses - HELD THAT:- Claim of the assessee was accepted by the Learned CIT(A) to the tune of 90% of the total foreign travelling expenses incurred by the assessee. But, the Learned CIT(A) in his finding has inadvertently restricted the disallowance at ₹ 1,38,381/- instead of ₹ 15,376/-. Thus, accordingly we hold that the issue is limited to the extent of ₹ 15,376 only. First of all, we note that there is no provision under the law to make the disallowance on estimated basis. As such we do not find any cogent material on the part of the Learned CIT(A) for making disallowance in part. Assessee being a body corporate cannot incur any expenditure personal in nature as held in the case of Sayaji Iron &Engg. Co.[2001 (7) TMI 70 - GUJARAT HIGH COURT] - assessee has made exports to the foreign countries as evident from the details filed by it (the assessee). Therefore, we hold that foreign travelling expenses were incurred by the assessee in the course of his business activities and therefore no disallowance is warranted.
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