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2018 (4) TMI 1059 - AT - Income TaxAllowability of prior period expenses - Held that:- We hold that the allowability of prior period expenses had to be made based on the finding that no deduction was claimed in the earlier years after recording the finding that the said expenditure had indeed been crystallized during the year. However, the method of accounting followed by the assessee also needs to be taken into consideration for the same. These findings are conspicuously absent in the orders of the lower authorities and accordingly we deem it fit and appropriate ,in the interest of justice and fair play, to remand the issue of prior period expenses to the file of the ld AO, for denovo adjudication and decide the same in accordance with law. Long term capital gain - Held that:- We find that the assessee had filed details of computation of long term capital loss of ₹ 20,17,000/- in the memo of income and the same was also furnished before the ld AO in the course of assessment proceedings. There is absolutely no discussion made by the ld AO in his assessment order with regard to this issue - AO having added the long term capital loss of ₹ 20,17,000/- under the head ‘income from business’ had also proceeded to separately add the redemption value of bonds of ₹ 1,30,00,000/- without understanding the facts. The veracity of the computation of long term capital loss of ₹ 20,17,000/- was not verified by the ld AO. No finding is also given by the ld AO with regard to carry forward of long term capital loss of ₹ 20,17,000/- to subsequent years in the assessment order. Hence we deem it fit and appropriate, in the interest of justice and fairplay, to remand this issue to the file of the ld AO , for denovo adjudication Disallowing judicial expenses - Held that:- Whether the liability at all would arise or not on the assessee would depend on the final outcome of the appeals pending. Hence the liability is contingent upon happening of a future event. Hence it could be safely concluded that the assessee had made provision for contingent liability which is not allowable as deduction. Hence we hold that the same had been rightly disallowed by the ld AO with regard to M/s Jai Balaji Industries Ltd. With regard to refund of EMD to M/s N.R.Sponge Pvt Ltd CITA had categorically held that the assessee had not offered to tax the sum of ₹ 11,12,000/- by forfeiture of EMD by crediting the same to profit and loss account. This finding has not been controverted by the assessee before us. Hence we hold that there is no need for making a separate provision for a pre-existing liability in the books of assessee, eventhough the same has been stated to be paid by the assessee on 27.6.2012 , ie. during the financial year 2012-13 relevant to Asst Year 2013-14. Accordingly, no relief is granted to the assessee in this regard. Disallowance of depreciation on intangible asset - Held that:- The payments made to Government of Orissa for afforestation charges for obtaining the mining lease, would squarely fall under the category of ‘licences’ or even ‘any other business or commercial rights of similar nature’ as per the definition of ‘intangible assets’ u/s 32 of the Act, thereby eligible for claim of depreciation u/s 32 of the Act. It is not in dispute that pursuant to this payment, and pursuant to other plant and machineries kept ready for use, the assessee would start its mining operations, the moment the mining lease has been granted by the Government of Orissa, Accordingly , we hold that the assessee is eligible for depreciation
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