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2015 (1) TMI 1251 - AT - Income TaxSale of depreciable cars - AR submitted that the purchase of the cars were classified by the assessee as depreciable assets forming part of the block of assets - AO has treated the sale of depreciable cars as trading transaction and taxed the same as business profit accordingly - Held that:- It is the policy of the Assessee and decision of the management to treat a particular asset as part of the block of asset and vice versa. In the instant case the assessee has treated the cars as part of block of assets and sold subsequently during the year under consideration. The Assessee is at liberty to treat items which are trading asset as part of the depreciable asset also. In such cases the accounting entries in the books of accounts will be a very important and most relevant consideration for coming to a conclusion as to whether the sale of such item gives raise to Income from Business" or not. We find no defect in the accounting treatment of the assessee. Hence we reverse the order of the lower authorities and ground raised by assessee is allowed. - Decided in favour of assessee Disallowance of sundry balance written off u/s. 36(ii) - Held that:- AR drew our attention to the paper book where the breakup of assessee's income for an amount of ₹ 2,87,472/- was shown pertaining to the sundry balance written off. From the aforesaid discussion, we find that assessee has duly shown its income in earlier year of the balance written off in the relevant year. Ld. DR has not brought anything on record contrary to the finding of Ld. AR. On the other hand the ld. DR relied on the order of authorities below. In view of the above discussion, we reverse the order of Authorities Below and this ground raised by assessee is allowed.- Decided in favour of assessee
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