TMI Blog2015 (8) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... ble expenditure. - Decided in favour of assessee. TDS on reimbursement of expenses - Held that:- There is no categorical finding that expenses were all only reimbursements made by the assessee. No such categorical finding is coming out from the orders of the lower authorities. The alternative submission of the assessee that the provisions of section 40(a)(ia) have no application for the payments made within the accounting year in view of the decision of the hon'ble Allahabad High Court in the case of CIT v. Vector Shipping Services Pvt. Ltd. [2013 (7) TMI 622 - ALLAHABAD HIGH COURT ] is accepted, as this Tribunal is consistently holding such view. Therefore, for limited purpose of examining as to whether all these payments were made with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 9,14,750 representing electricity charges payable by the assessee on the ground that the assessee is contesting the demand raised by the Electricity Board and therefore the liability is yet to be crystallised. The Assessing Officer held that the liability is uncertain and contingent liability till the exact liability is quantified by the Board. On appeal, the Commissioner of Income-tax (Appeals) affirmed the order of the Assessing Officer accepting the contention of the Assessing Officer that this expenditure is only a contingent liability. 4. Counsel for the assessee submits that incurring of liability is certain but only the quantum is disputed by the assessee. Counsel for the assessee submits that liability is not a contingent l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... policies adopted by an assessee should be such so as to represent a true and fair view of the state of affairs of the business, profession or vocation in the financial statements prepared and presented on the basis of such accounting policies. For this purpose, the major considerations governing the selection and application of accounting policies are the following, namely : (i) Prudence : Provisions should be made for all known liabilities and losses even though the amount cannot be determined with certainty and represents only a best estimate in the light of available information. 7. As could be seen from the above, provision should be made for all known liabilities and losses even though the amount cannot be determined with certa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submits that all these expenses were reimbursement and therefore, provisions of section 40(a)(ia) have no application. He places reliance on the decision of the Jaipur Bench of this Tribunal in the case Asst. CIT v. Seaward Exports P. Ltd. [2012] 17 ITR (Trib) 353 (Jaipur). In the alternative, counsel for the assessee submits that all these expenses were all paid within the accounting year and therefore, following the decision of the hon'ble Allahabad High Court in the case of CIT v. Vector Shipping Services P. Ltd. dated July 9, 2013 in I. T. A. No. 122 of 2013 [2013] 357 ITR 642 (All), no disallowance is warranted. 11. The Departmental representative supports the orders of the lower authorities. 12. Heard both sides. Perused o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowed ₹ 1,87,940 which was debited under the head bad debts stating that out of ₹ 1,87,940 an amount of ₹ 18,440 represents debts due from the Ministry of Defence and the remaining amount of ₹ 1,69,500 is loss on account of irrecoverable advances which was made for development of moulds and this is capital loss. On appeal, the Commissioner of Income-tax (Appeals) sustained the disallowance made by the Assessing Officer. 15. Counsel for the assessee submits that bad debts written off of ₹ 18,440 has to be allowed as deduction as the said amount was written off in the books of account in view of the decision of the hon'ble Supreme Court in the case of T. R. F. Ltd. v. CIT [2010] 323 ITR 397 (SC). C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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