TMI Blog2019 (3) TMI 2009X X X X Extracts X X X X X X X X Extracts X X X X ..... ed AO committed error in taking the sale proceeds as income and ignoring the loss - CIT(A) considered the plea of the assessee and satisfied that the assessee could demonstrate that the income u/s 11 had to be determined on commercial principles - HELD THAT:- We are also of the considered opinion that the income u/s 11 has to be determined on commercial principles and to determine the same, the losses arising on sale of assets of the society shall be considered. Therefore, the capital loss of Rs.2,14,310/- has to be considered while calculating the income of the assessee. With this view of the matter, we uphold the finding of the ld. CIT(A) on this ground and dismiss Ground No.3. Disallowing the provisions relating to the gratuity, leave encashment and cancer care scheme - HELD THAT:- We are satisfied that such a provision was made on scientific basis inasmuch as the explanation of the assessee is that the employees accrue a right of gratuity on their continuous service for five years and the society has to pay them the gratuity as and when they retire, so also the leave encashment, which are ascertain amounts but the time of payment is unknown and, therefore, as a prudent emp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be produced by the assessee and to take a fresh view at the matter. This is more particularly in view of the fact that according to the assessee, learned AO allowed these funds quite for a long term both priorand alsosubsequent years. We direct the assessee to produce the material before the AO and to substantiate their claim. We, therefore, allow this ground for statistical purposes. - ITA No. 2607/Del/2013, 2816/Del/2013 - - - Dated:- 28-3-2019 - SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER For the Assessee : Shri Shailender Bajaj, CA, Shri R.R. Maurya, Advocate For the Revenue : SMT. Sushma Singh, CIT DR ORDER PER K. NARASIMHA CHARY, JM These are crossed appeals filed both by Revenue and the assessee challenging the order dated 1.2.2013 in Appeal No.240/269/08-09 passed by the Learned Commissioner of Income-tax(Appeals)-XXI, New Delhi { CIT(A) } for Assessment Year 2006-07. 2. Brief facts of the case are that the Indraprastha Cancer Society Research Centre is registered u/s 12A(a) of the Income-tax Act, 1961 ( the Act ) vide No.DIT(Exemption)/1994-95/601/45/28 dated 8.5.1995. The society is also notified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rastha Cancer Society, ITA No.240/2014 order dated 18.11.2014 considered the question whether after claiming deduction in respect of the cost of the assets u/s 35(1) of the Act, assessee again claimed deduction on account of depreciation in respect of the same asset. Hon ble jurisdictional High Court held the issue in favour of the assessee. In view of the binding precedent of the jurisdictional High Court in assessee s own case, we do not find any unreasonableness in the order of the ld. CIT(A). We, therefore, confirm the order of the ld. CIT(A) and dismiss Ground Nos. 1 2. 6. Ground No.3 relates to the deletion of Rs.2,14,310/- added by disallowing the loss on sale of assets. Plea of the assessee is that the assets were sold at a price lesser than the WDV of the assets and when the depreciation is allowed following the commercial principle, there is no bar to consider the loss and the learned AO committed error in taking the sale proceeds as income and ignoring the loss. On this aspect, learned CIT(A) considered the plea of the assessee and satisfied that the assessee could demonstrate that the income u/s 11 had to be determined on commercial principles. We are also of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to depreciation. However, as a matter of fact, this ground is not covered. 10. It is the submission of the learned AR that it is the practice of the assessee that whenever the advances are paid to the vendors, in the year when the machinery is supplied and the expenditure is booked, only the balance amount is taken cognizance and not the entire amount. This is an aspect which requires verification at the end of the learned AO as to whether the expenditure is booked for the entire expenditure or only for the balance amount of the cost of the machinery. We, therefore, set aside this issue to the file of the learned AO to verify whether the advance amount is excluded from the cost of the machinery or the capital assets in the year in which the expenditure is taken cognizance of and if the advance amount is excluded while booking the expenditure to allow this advance amount for this year. Ground No.5 is, therefore, allowed for statistical purposes. 11. Now coming to the appeal of the assessee, the sole ground taken is in respect of the addition made on account of the earmarked funds received by the assessee. The assessment order shows that during the year the assessee received ..... X X X X Extracts X X X X X X X X Extracts X X X X
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