Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (8) TMI 209 - AT - Income TaxNature of loss - business loss or capital loss - Held that:- As far as write off of export benefit (DEPB) we observe that ld. CIT(A) has given specific finding that he has verified the books of account of assessee and has found that the export benefit (DEPB) has been shown by the assessee as an income in the earlier years/this year. We further observe that the reason given by assessee for write off of this expenditure was that the amount of export benefit was calculated at its level and income of ₹ 8,94,971/- was booked and the same was shown receivable from the Government department but thereafter on account of recalculation it was found that this impugned amount of ₹ 8,94,971/- has been booked excessively as income and which is not receivable and the same was transferred to balance written off account. On going through these facts, we are of the view that assessee has rightly claimed ₹ 8,94,971/- as business expenditure. Moving ahead to examine the balance write off of ₹ 172402/- of Esbee Electricals, ₹ 1139020/- of R.P. Construction and ₹ 2313118/- of Sangam Construction, on perusal of records relating to ledger account of these three parties, we find that there have been regular business transactions in the form of payment through bank and by cash towards supply of material and labour, free supply of goods to the contractors for job work purposes, income-tax has been deducted at source on regular job works bills. We observe that there have been continuous business transactions with a bona fide belief of consistency of business relation with these three parties. However, at one point of time when these three parties were not traceable even after necessary efforts last resort left with the assessee was to transfer these irrecoverable amounts as business loss. We, therefore, are of the view that these advances of ₹ 36,24,540/- (Rs.172402 + ₹ 1139020/- + ₹ 2313118/-) being irrecoverable business advances have been rightly claimed as business expenditure by the assessee. We find no reason to interfere with the order of ld. CIT(A). We uphold the same
|