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2015 (7) TMI 846 - AT - Income TaxDisallowance of write off of being forfeiture of surety given by the assessee on behalf of associate concern - CIT(A) allowed claim - Held that:- CIT(A), though, held that the amount in question was earlier given as advance for purchase of machinery but has changed its character to that of guaranty/surety but has not given any finding as to how the amount even given as a guaranty for purchase of machinery would fall in the definition of revenue loss. The Ld. CIT(A) has simply observed that earlier the assessee had paid the amount as an advance with purchase of machinery but later on the same was converted as guaranty for purchase of machinery by M/s. Vinedale Ltd. and thereafter without giving any reasoning treated the same as revenue loss. The Ld. CIT(A) even has not considered that the amount of advance paid to M/s. Alfa Laval (India) Ltd. which was initially treated as advance on behalf of M/s. Vinedale Ltd. was only ₹ 81.30 lakhs. The said amount has never changed its character as a guaranty rather was advance for the purchase of machinery on behalf of M/s. Vinedale Ltd. The remaining amount was paid by the assessee for settlement of the accounts of M/s. Vinedale Ltd. which were on account of outstanding dues for the purchase of machinery by M/s. Vinedale Ltd. The assessee has paid the said amount on behalf of M/s. Vinedale Ltd. being its guarantor/surety which was not relating to any business or trading activity of the assessee in any manner. We therefore do not find any merit in the order of the Ld. CIT(A) and the same is therefore set aside. The action of the AO disallowing the said loss is confirmed. - Decided against assessee. Deduction on account of consumption of containers disallowed - Held that:- CIT(A) ought to have considered the claim of the assessee in exercise of his appellate jurisdiction under section 250 of the Act. Moreover, if the assessee is, otherwise, entitled to a claim of deduction but due to his ignorance or for some other reason could not claim the same in the return of income, but has raised his claim before the appellate authority, the appellate authority should have looked into the same. The assessee cannot be burdened with the taxes which he otherwise is not liable to pay under the law. We, accordingly, restore this issue to the file of the Ld. CIT(A) to consider the claim of the assessee on merits and pass a reasoned order, irrespective of the returned loss/ income of the assessee. The Ld. CIT(A) will be at liberty to call the views/remand report of the AO on this issue and to decide the issue in accordance with law. - Decided in favour of assessee for statistical purposes. Disallowance under section 14A - Held that:- Restore this issue also to the file of the Ld. CIT(A) for adjudication afresh. It is made clear that if the assessee had made no investments for earning of exempt income, no disallowance would be warranted under section 14A. The Ld. CIT(A) will also look into the other contentions raised by the assessee on this issue. Accordingly, this appeal of the assessee is allowed for statistical purposes.
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