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2019 (10) TMI 706 - AT - Income TaxAddition on account of suppressed receipts - AO not considered the revised return of income - HELD THAT:- Allegation of assessing officer is that TDS disclosed in the return of income is only of ₹ 3.03 crore; whereas as per Form 26 AS is ₹ 5.18 crore. We have noted that in the ordinal return of income the assessee claimed TDS of ₹ 3.03 crore however, in the revised return of income filed by assessee on 5th November 2013, the assessee claimed TDS of ₹ 6.53(as per page 73 of paper book) . This fact clearly shows that the assessing officer has not considered the revised return of income. The revised return of income was filed within prescribed period of limitation under the Act. Considering the fact that the assessing officer has not considered the revised return of income filed by assessee within time, we restore this ground of appeal to the file of assessing officer to verify the fact and grant relief to the assessee in accordance with law. Disallowance of 25% of expenses - allegation of the Assessing Officer that the assessee has not maintained log books for use of expenses for business as well as for non-business purpose - HELD THAT:- AO has not called any specific voucher, bills or invoices before discarding the submission of the assessee. Commissioner (Appeals) confirmed the action of assessing officer with similar observation without specifying any reason or deficiency in the evidence furnish by assessee. The assessee is a corporate entity and engaged in the business of integrated financial services which consist of investment banking, portfolio, fund management, corporate advisory, institutional broking and distribution, retail brokering distribution in mutual advisory services and distribution etc. Since, none of the expenses claimed by assessee is disputed by the lower authorities. The lower authorities merely disallowed the expenses on ad-hock basis. Considering the fact that no deficiencies in the evidence furnish by the assessee was not specified nor any specific reason before making ad hoc disallowance was given by assessing officer therefore, we direct the assessing officer to delete the entire addition - Decided in favour of assessee Disallowance of computer maintenance expenses - HELD THAT:- Assessee has specifically stated in his reply dated 12th December 2014 that only system maintenance expenses were debited to the particular head. The assessee has not debited software charges in its profit and loss account. The assessee also stated that most of the expenditure is incurred on annual maintenance contract with a validity of one year only. The Hon’ble jurisdictional High Court in CIT versus Raychem RPG Ltd [2011 (7) TMI 953 - BOMBAY HIGH COURT] held that even the expenditure is incurred for acquisition of software the same is allowable as revenue expenditure. Therefore, considering the decision of Hon’ble Bombay High Court referred, we direct the assessing officer to delete the entire disallowance on account of computer maintenance expenses. In the result this ground of appeal is allowed. Disallowance of bad-debts - HELD THAT:- As perusal of those documentary evidence clearly establish that the assessee was able to recover only ₹ 20 lakhs and accordingly the remaining amount of ₹ 32.68 lakhs was claimed as bad-debts. Similar disallowance was made for Assessment Year 2010-11 and on in appeal before the ld. Commissioner (Appeals), the same was deleted. The assessee has specifically stated that income was duly accounted in earlier years. In our considered view, the assessee fulfilled all requisite condition prescribed under section 36(2) of the Act. Moreover, on similar set of fact, the similar disallowance was deleted by ld. Commissioner (Appeals) in appeal for Assessment Year 2010-11. Therefore, no justifiable reason for making disallowance of bad-debts written off, which has been sufficiently justified by assessee. Hence, we direct the Assessing Officer to delete the disallowance of bad-debts. Disallowance on depreciation on office equipment - @ 10% OR 15% - HELD THAT:- Assessing Officer restricted the disallowances to 10% on the air-conditioners, refrigerators, water heaters, communication equipment etc. instead of 15% as claimed by assessee holding that as per Appendix -1 the depreciation is allowable @ 10% only. We have noted that as per the rate of depreciation the 10% rate is applicable in respect of furniture and fittings including electrical fittings which consist of electrical wiring, switches, sockets and other fittings and fans. None of the item on which the assessee claimed is falls in the category-II of Appendix-1. Moreover, we find force in the submission of ld. AR of the assessee that the assessee correctly classified the items as a part of Plant & Machinery block. We are also in full agreement with the submission of ld. AR of the assessee that once the assets form part of block of asset, the same cannot be interfered in any subsequent year. Hence, we direct the Assessing Officer to delete the disallowance Disallowance on account of loss on error trade - HELD THAT:- Assessee-company is engaged in the business of financial services, which consist of investment banking, portfolio and fund management, institutional broking and distribution, retail broking etc. The assessee in the show-cause notice issued by Assessing Officer has explained that due to human error in punching the wrong scrip code, or punching of wrong quantity or in punching buy order in place of sale order due to human error the mistake may occur, which may result in income or loss - assessee has sufficiently explained the trade loss. The Assessing Officer instead of considering the loss on account of error trade treated the same as speculative loss. We have further noted that the assessee has shown total receipt from operation of ₹ 74.24 crore and the trade loss claimed by assessee is miniscule. Explanation furnished by assessee, we direct the Assessing Officer to delete the disallowance on account of trade error - Appeal filed by assessee is allowed.
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