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ACIT, Ahmedabad Circle-3, Ahmedabad Versus M/s. Manilal & Sons, Ahmedabad

2015 (12) TMI 614 - ITAT AHMEDABAD

Disallowance of machinery repair expenses - CIT(A) deleted the addition - Held that:- There is no rebuttal to the CIT(A)’s findings about kerosene, diesel oil expenses. And also that each head is of less than ₹ 25,000/- except in one case. Revenue fails to single out a case wherein any repair item gives enduring advantage or increases machine capacity. It quotes case law of Mahalaxmi Textile [1967 (5) TMI 4 - SUPREME Court ] and Ballimal Navalkishor (1997 (1) TMI 3 - SUPREME Court) in supp .....

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id. - Decided against revenue

Bad debts disallowance - CIT(A) deleted the addition - Held that:- The case file reveals that the assessee maintained two accounts under the heads security ledger deposits and a running one. Its former sum of security deposits could not be recovered despite exercising all civil and penal remedies (supra). The same proves non-recoverability thereof. The lower appellate authority also allows it as a business loss by following tribunal’s order (supra). The R .....

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Ahmedabad dated 25-01-2011 in appeal no. CIT(A)- XVI/ACIT.Cr.3/110/0/10-11, in proceedings under section 143(3) r.w.s. 147 of the Income Tax Act, 1961; in short the Act. 2. The Revenue s first substantive ground challenges the CIT(A) s order deleting disallowance/addition of ₹ 6,51,333/- made qua machinery repair expenses. The asessee-firm manufactures precision parts. It claimed the impugned expenditure on account of repairing charges for plant and machinery. The written down value of pla .....

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ies, enclosed bills demonstrating purchase of major items as bearings, machinery plant, ball screw etc. The Assessing Officer went by his earlier reasoning for disallowing/adding assessee s claim in assessment order. 3. The CIT(A) has accepted assessee s corresponding ground as follow:- 3.1 This is regarding disallowance of ₹ 6,51,333/- being machinery repair expenses. In the assessment order the AO has stated that the assessee has claimed this expenditure as machinery repair expenses. It .....

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llate proceeding the appellant has stated that the AO has wrongly taken the entire expenditure as capital expenditure. Perusal of the expenditure account shows that the expenditure is in respect of purchase of oil, kerosene, diesel and various other small expenses. The total expenditure incurred towards kerosene, diesel and oil comes to ₹ 1,84,464/- which cannot be regarded as capital expenditure by any stretch of imagination. As regards machinery parts are concerned, the assessee is engag .....

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considered the submission made by the appellant and observation of the AO. I have perused through the ledger account of machinery maintenance almost all the expenses are in respect of oil, diesel, kerosene, bearings and various other machine parts of small small amount. The only expenditure, which is more than ₹ 25,000/- is on ball screw part of the CNC machine amounted to ₹ 1,50,277/-. Other bigger expenses are on bearings, which items are clearly consumables and machine cover. None .....

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kerosene, diesel oil expenses of ₹ 1,84,689/- (supra). And also that each head is of less than ₹ 25,000/- except in one case. Paper book pages 5-27 contain the corresponding invoices. Revenue fails to single out a case wherein any repair item gives enduring advantage or increases machine capacity. It quotes case law of Mahalaxmi Textile and Ballimal Navalkishor (supra) in support. We find the former judicial verdict upheld the tribunal s reference made to the concerned high court as .....

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CIT(A) s order deleting bad debts disallowance of ₹ 24,80,126/. The lower appellate findings comprise of the assessing authority s observations, assessee s submission as under:- 4.1 This is regarding disallowance of bad debt of ₹ 24, 80, 126/-. In the assessment order the AO has stated that the assessee has claimed these bad debts by writing off the same in the books of accounts, which is due from the central projects and development organization. The assessee has stated that these .....

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has stated that there is no requirement that the assessee has to prove that the debt has become bad in view of the decision of honorable Supreme Court in the case of TRF Ltd. The appellant has stated that the AO has misunderstood the facts when it has stated that only part it has been written off and not full. The appellant is maintaining two accounts one in respect of goods supplied and second in respect of security tender deposit with the purchasers. The appellant had sold goods to the centra .....

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ly of goods. The security deposit has not been returned even after making strenuous efforts for recovery of the amount. The cheques issued by the debtor were deposited in the bank, but they were bounced for want of funds. The assessee has filed a criminal complaint in the court of chief Metropolitan Magistrate Ahmedabad on 17/06/2002. The complaint was also filed with the Gandhinagar police station on 29/09/2001. In view of this reason an amount of ₹ 24, 80, 126/-was claimed as bad debt. T .....

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