TMI Blog2010 (10) TMI 758X X X X Extracts X X X X X X X X Extracts X X X X ..... of the provisions of section 145(2), wherein Accounting Standard-2 has been notified to be followed - Decided in favour of assessee. Bad debts - After 1st April, 1989, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable - It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee." There is no dispute about the amount having been actually written off - Decided in favour of assessee. Interest on work in progress - This issue has already been considered in assessment year 2004-05 vide ITA No.7257/Mum/2008 and for the reasons contained therein, dismiss this ground of appeal - Decided in favour of assessee. - ITA No. 7257/Mum/2008, ITA No. 7334/Mum/2008 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Accounting Standard issued by the Institute of Chartered Accountants of India dealing with valuation of inventories. He referred to para 12 of the said statement which reads as under:- "12. Interest and other borrowing costs are usually considered as not relating to bringing the inventories to their present location and condition and are, therefore, usually not included in the cost of inventories." He further referred to para 6 of the said statement which reads as under:- "6. The cost of inventories should comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition." He further referred to para 14 of the said statement which reads as und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces:- 1. Bad debts written off Rs.17,34,958/-. 2. Interest on work in progress Rs.5,97,412/-. 9. The learned CIT(Appeals) deleted the addition on both the counts. Being aggrieved, the department is in appeal before us and has taken following 2 grounds of appeal:- "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting disallowance of Rs.17,34,958/- on account of bad debts without appreciating the facts and circumstances of the case." 2. On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting disallowance made by the A.O. amounting to Rs.5,97,412/- on account of proportionate interest expenses without appreciating the facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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