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2017 (2) TMI 408 - AT - Income TaxDepreciation @ of 25% on insurance claim received during the year against DG set - Held that:- The assessee has incurred expenditure on breakdown of DG set amounting to ₹ 12,43,508/- in assessment years 2000-01 and 2001-02 and said expenses were claimed as revenue expenditure in those years. The assessee lodged its claim of ₹ 12,43,08/- with insurance company and credited the amount of claim in profit and loss account in those years. In the year under consideration, the assessee received claim of ₹ 2,68,386/- and the balance amount of claim was, therefore written off. We find that the claim received by the assessee is against the expenses claimed as revenue expenditure towards repair of the DG set, and it is not towards meeting any cost of the DG set and, therefore, provisions of section 43(1) of the Act are not attracted. The Assessing Officer in earlier year has already allowed claim of the expenditure towards DG set as revenue expenditure, and then reimbursement of the same by the insurance company cannot be held as towards cost of the DG set. Accordingly, we delete the disallowance of ₹ 67,096/- confirmed by the learned Commissioner of Income-tax (Appeals) out of the depreciation claimed on DG set. Disallowance of professional fees - Held that:- We find that the main agreement between the assessee company and M/s. “ARBEITEN” is not clear, whether it was for revival of the assessee company or for targeting companies in the line of the business of the assessee or another lines of business, but in supplementary agreement. Part of the agreement indicates that the consultancy expenses were for the purpose of establishing a new venture and not for running of the existing business. Further, the Assessing Officer has already pointed out main agreement was not witnessed by any person. On perusal of copy of collaborator’s profile we find that it is not signed by the second party. We find that the assessee has not been able to substantiate that expenses, were in respect of the existing business. In view of above facts, we are of considered opinion that the order of learned Commissioner of Income-tax (Appeals) on the issue in dispute is well reasoned . Disallowance on account of bad debts written off - Held that:- It is evident from the annual report that assessee has made only provision for doubtful debt and debt has not been written off as bad in its books of accounts. Further, in note 8 of the Notes to Account, which is available on page 28 of the annual report provision for doubtful debts for current year and previous year are mentioned. In view of the facts mentioned in the annual report of the assessee, the claim of the assessee need further verification. In our opinion, it is appropriate to restore the matter back to the file of the Assessing Officer for verification of facts whether the assessee has written off the bad debts in books of accounts of the assessee. Accordingly, the ground of the appeal is allowed for statistical purpose.
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