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2018 (11) TMI 317 - ITAT DELHIAddition on account of value of DEPB license - assessee entitled to DEPB license against the export of goods - estimation of the realizable value of the DEPBs as against their actual value - Held that:- We find that in respect of the sales that were made in the Financial years 2012-13, 2013-14, 2014-15, when the DEPB was sold to Vicky Bhalla, Jain International and Mehta Export Corporation, the assessee realized only 83.14% to 88.08% of the actual value of DEPBs necessitating them to written off the loss. So also in the year 2014, there was lapse of DEPBs. There is no dispute from the revenue as to the actual value realized by the assessee in respect of the DEPB on their sale which is something around 90% or less of their actual value. The statistics furnished by the assessee suggests that there is a basis for the assessee to estimate the realizable value of the DEPBs as against their actual value and inasmuch the DEPBs that fetched the highest price from Bajaj Overseas Impex was at 90%, we are convinced to believe that there is a scientific basis for the assessee to estimate the probable realizable value of the DEPB at 90%. Further in view of the Notification No. SO 69(E) dated 25.1.1996, it is permissible for the assessee to make provision for all known liabilities and losses even though the amount cannot be a certainty and represents only a best estimate in the light of available information and if the fundamental accounting assumptions relating to going concern consistency and accrual are followed in the financial statements, specific disclosure in respect of such assumptions is not required and in this context consistency is referred to the assumption that accounting policy are consistent from one period to another. Nothing irregular in the assessee declaring the realizable value of the DEPBs on their sale at 90% and to write off the losses arising on the sale or lapse of DEPBs in the subsequent years. With this view of the matter, we are inclined to accept the submissions made by the assessee and to direct the learned AO to delete the addition made on this score. - Decided in favour of assessee Ad hoc disallowance of the telephone expenses, travelling and conveyance expenses and export promotion expenses - AO recorded that there is an element of personal use by the directors and employees of the assessee company - CIT-A allowed part relief - Held that:- CIT(A) had given some relief to the assessee on this still there is no reason or logic behind the sustaining of the disallowance as enumerated above. It is purely an ad hoc addition on estimate basis without reference to the books of accounts of the assessee or finding out any particular discrepancy therein. The assessee produced the details of the telephone expenses, export promotion expenses by way of page Nos.6 to 9 of the paper book and none of these expenses would go to show the involvement of the personal expenses in this. In these circumstances, we are of the considered opinion, without pointing out to any particular discrepancy in the books of accounts of the assessee or without rejecting the books of accounts, such disallowance on estimate basis has no logic behind it and we find it difficult to sustain the same. - Decided in favour of assessee.
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