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TMI Blog2014 (1) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is paid as penalty and therefore no covered u/s 37; 2. On the facts and circumstances of the case and in law the ld. CIT(A) erred in law in upholding the disallowance of the following amounts written off as irrecoverable u/s 37: a) Rs.2,01,470/- being unmoved staff advances since 1999-2000. b) Rs.2,21,443/- being advances to various government departments for undertaking civil maintenances job. c) Rs.1,37,949/- being sundry un-reconciled balances lying in various accounts. 3. Without prejudice to the above, the ld. CIT(A) should have appreciated that since the non recoverable balances were in regular course of business the same were allo9wable as a business loss u/s 28 or u/s 37. 4. The appellant reserves its right to add, amend al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance given to staff 2,36,455 EMDs not recovered from the respective parties Advances given for civil department for sundry maintenance works 2,62,463 Expenses remained to be booked Various sundry debtors 36,670 Unmoved balances for several year Excise duty not recovered 49,960 Unmoved balances for several year Advance payments for purchases 41,049 Sundry advances remaining unmoved for more than 10 years Other sundry balances/deposits written off 1,37,949 Un-reconciled/unmoved balances Total 19,37,829 2.2.About the first item of Rs.9,68,813/-,it was submitted that the assessee-company had paid liquidation damages charged to Government of India for violation of contract regarding issue of delay in the delivery of v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that payment in question was penalty, that same was not allowable as per the provisions of the section 37 of the Act. 2.4.We have heard the rival submissions and perused the material before us. We find that there was an agreement between the assessee and Govt.of India for supply of medicines. As per the terms and conditions of the agreement assessee had to supply medicines in stipulated time frame and in case of failure to adhere to time schedule assessee had to pay liquidated damages to the buyer. As per the special conditions to the contract if the supplier failed to deliver any or all goods within time periods specified in the contract the purchaser would ..........deduct from the contract price as agreed liquidated damages a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about advances given to various government departments, including the PWD departments. FAA has given a categorical finding of fact that no details of departments except for of the PWD Department were furnished before him. In these circumstances he held that in view of lack of proof that as to when and to whom these advances were given same could not be allowed u/s.37 or 36(1)(vii)of the Act. Before us AR submitted that matter might be decided on merits. DR supported the order of the FAA. After hearing the rival submissions we are of the opinion that order of the FAA does not suffer from any infirmity. In absence of details of expenditure claimed by the assessee he has rightly disallowed the claim of the assessee. Part b of Ground no.2 is d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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