TMI Blog2012 (12) TMI 635X X X X Extracts X X X X X X X X Extracts X X X X ..... hat it is a typographical error - set aside the issue to the file of the AO to adjudicate upon the alternate ground and also call for a corrected report from the valuation cell Discount for rate difference of 15% from the CPWD rates allowed. Disallowance of irrecoverable advances/investments written off from the books of account – Held that:- The assessee is in the real estate/construction and in the hotel business & the amount towards inter-corporate deposits/investments made with the group company M/s Prajay Financial Services are in the nature of capital investments made by the assessee also confirmed in the case Hasimara Industries Ltd. Vs. CIT [1998 (5) TMI 7 - SUPREME COURT] and the decision of Greaves Ltd. Vs. CIT and another (2001 (3) TMI 33 - BOMBAY HIGH COURT) - thus the deposits pertains to capital asset and non-recovery of any amount therefrom constitutes capital loss and the same cannot be allowed as deduction of bad debts - against assessee Disallowance of claim of deduction u/s 80IB – Held that:- Following the decision of court in case of Dr. Mrs. Renuka Datla Vs. CIT [1999 (8) TMI 46 - ANDHRA PRADESH HIGH COURT] assessee was not independently engaged in de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Rs. 8,18,390/- and cost of each generator is less than 5,00,000 from which it is evident that the cost of generator at Rs. 5,00,000 (1 unit) and cost of transformer at Rs. 2,00,000 (1 Unit) was not separately recorded by the assessee under the head electrical equipment. 3. After hearing both sides we find that the tax effect in the impugned appeal is less than Rs. 3 lakhs. The CBDT vide Instruction No. 3of 2011 dated 9.2.2011 has revised the monitory limit for filing the appeals by the Department before the ITAT, according to which the same has been raised to Rs. 3 lakhs. We find Hon'ble Bombay High Court in the case of Madhukar K. Inamdar HUF, 318 ITR 149 (Bom), has held that Circular issued by the CBDT revising the monitory limit would be applicable to the pending cases. Therefore, tax effect in the impugned appeal being less than Rs. 3 lakhs, the appeal filed by the revenue, in our opinion, is not maintainable. Accordingly the same is dismissed. 4. In the result, appeal of the revenue is dismissed. ITA NO. 650/Hyd/07 appeal by the assessee for 2002-03 5. This Appeal against the order u/s 263 has been withdrawn by the assessee as the assessee has preferred appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, to arrive at the differential between this and the actual cost of construction as at 31/03/2002 and adding the said differential to the total income u/s 69 of the Act. The Assessing Officer ignored the appellant s plea that the estimated cost of construction arrived at as on 31/03/2004 by the Valuation Officer should be compared with the actual cost of construction as per books of account as of 31/03/2004, and the latter being excess no adjustment is called for. 4. The Assessing Officer erred in rejecting the appellant s objection that the cost of index of 168 adopted by the Valuation Officer applicable as on 01/06/1998, cannot form the basis for arriving at the cost of construction as on 31/03/2004 and thus the valuation exercise as carried out by the Valuation Officer is defective and cannot from the basis for making an adjustment under section 69 of the Act. 9. The CIT(A) held that while going through the valuation report there is no calculation being made with regard to 31/03/2004 by the valuation cell. Further, on page 1 of the report, the period of construction has been mentioned as February, 1998 to 12th August, 2001 and the valuation officer has not used the 2003 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows: 3. The CIT(A) while upholding the adoption of CPWD rates erred in not allowing discount for rate difference of 15% from the CPWD rates in terms of the decision of Hon. ITAT, Visakhapatnam Bench in the case of ITO-Ward-3, Vijayawada Vs. Sriranganayakamma vide ITA No. 597/V/98 rendred in December 2004. 13. We have heard the arguments of both the parties and perused the record as well as gone through the orders of the authorities b below. We find merit in the argument of the assessee that The CIT(A) while upholding the adoption of CPWD rates erred in not allowing discount for rate difference of 15% from the CPWD rates in terms of the decision of Hon. ITAT, Visakhapatnam Bench in the case of Sriranganayakamma(supra). Therefore, respectfully following the decision of ITAT, Visakhapatnam Bench in the case of ITO Vs. Vijayawada Sriranganayakamma we allow 15% discount from the CPWD rates. 14. The next ground of appeal i.e. ground No. 4 raised by the assessee is as follows: The CIT(A) erred in not following the ratio laid down by Hon. ITAT, Visakhapatnam Bench in the above referred case, for allowing self-supervision at 10% but instead allowed the same at 7.5% 15. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount and claimed deduction for the same. It was submitted that deduction towards irrecoverable advances are claimed u/s 28/29 of the Act. It was further submitted that deduction from the taxable profits are to be allowed not only in respect of specific provisions as contained in sections 30 to 37, but also on general principles. It was contended that business loss is an allowable deduction from taxable profits on general principles. Stating that such loss has arisen from its business, the assessee contended that the same should be allowed deduction u/s 28/29 of the Act. For this proposition, he relied on the decisions in CIT Vs. Mysore Sugar Co. Ltd., [1962] 46 ITR 649 (SC), CIT Vs. Rohtas Industries Ltd., [1979] 120 ITR 110 (Cal.) and IBM World Trade Corporation Vs. CIT [1990] 186 ITR 412 (Bom.). 21. We have heard both the parties and perused the record. We find that the assessee is in the real estate/construction and in the hotel business. The amount of Rs. 32,90,868/- and Rs. 50,000/- towards inter-corporate deposits/investments made with the group company M/s Prajay Financial Services are in the nature of capital investments made by the assessee. Our view is fortified by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is directed against the action of the CIT(A) in confirming the order of the Assessing Officer in disallowing Rs. 77,00,000/- towards irrecoverable advances written off from the books of account. 28. The Assessing Officer noted that for allowing bad debts as revenue expenditure, the two preconditions are that i) the debt should on revenue account and ii) the same must have been taken into account in computing the profits of the business of the assessee for any earlier year, as per sub-section (2) of section 36 of the Act. After observing that the principle amount of Rs. 77,00,000/- was never offered to tax and the assessee did not satisfy the preconditions as mentioned above, the Assessing Officer disallowed the assessee s claim by relying on few case laws. 29. On appeal, the CIT(A) confirmed the action of the Assessing Officer. As regards the alternate claim of the assessee that the same should be allowed u/s 28/29 of the Act, the CIT(A) held that the investments of Rs. 77,00,000/- made by the assessee in inter corporate deposits out of its surplus share capital were fully in the nature of capital investments. Accordingly, writing off of such investments do constitute a capital ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
