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2012 (12) TMI 719 - AT - Income TaxWrite off of bad debt in the books of account u/s 36(1)(vii) – Held that:- Following the decision in case of T.R.F. LTD. Versus COMMISSIONER OF INCOME-TAX [2010 (2) TMI 211 - SUPREME COURT] to obtain a deduction in relation to bad debts, it is not necessary for the assessee to establish that the debt,in fact has become irrecoverable. It is enough of the bad debt is written off as irrecoverable in the accounts of the assessee - matter remanded to the Assessing officer to examine, solely to the extent of write off, whether the debt or part thereof was written off in the accounts of the assessee. Sale tax collection - capital v/s revenue receipt - assessee has been granted subsidy in respect of sales tax receipt – Held that:- As decided in Sahney Steel & Press Works Ltd v CIT [1997 (9) TMI 3 - SUPREME COURT] the subsidy by way of refund of sales tax on purchase of machinery is operational subsidy and hence revenue receipt - set aside the issue to the files of the AO to consider whether the present subsidy scheme enjoyed by the Assessee is identical with that of the scheme framed by the Government of Maharashtra in 1979, considered in the case of DCIT Versus Reliance Industries Limited [ 2003 (10) TMI 255 - ITAT BOMBAY-J] and if so teat it as a capital receipt. Disallowance of discount given to stockists – Held that:- What is offered by the assessee to the stockists are nothing but discount because the assessee sells the goods to the stockists, who is turn sells the goods to the consumer. In the sale transaction between the assessee and the stockists there cannot be payment of commission to the purchaser himself. Here stockists themselves are buying goods and it cannot be said that they are rendering any service in the course of such buying of goods which will render any payment to them as commission. Thus confirming findings of the CIT(A) that what was offered to the stockists is nothing but discount under provisions to sec.194H will not apply – in favour of assessee. Computation of capital gains arising from transfer of undertaking – Held that:- Merely because the land was not conveyed by means of a registered conveyance deed, it cannot be said that the transferee who was permitted to enjoy complete domain over the land is not owner of the land. (Mysore minerals). Hence,transfer of the undertaking by the Assessee for a lumsum consideration should be considered as a slump sale to which provisions of sec 50B will be applicable. Hence in such cases provisions of sec 50C can not be applied in view of Explanation (2) to sec 2(42C) which has clarified that assignment of value for land and building the purpose of registration would not affect the computation of capital gains u/s 50B. Further in this case there was no stamped conveyance deed for transferring land - Order of the CIT(A) is upheld - revenue’s appeal is dismissed on this issue - In the result, the appeal of the revenue is partly allowed for statistical purposes.
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