TMI Blog2009 (9) TMI 962X X X X Extracts X X X X X X X X Extracts X X X X ..... nts of Hon ble Allahabad High Court in the case of Dhampur Sugar Mills Ltd. and also in the case of Swedeshi Mining and Manufacturing Co. Ltd. and in the case of Shadilal Enterprises Ltd. He also submitted that these judgments were not considered by the tribunal in the earlier years and hence this issue should be decided in favour of the assessee by following the judgments of Hon ble Allahabad High Court. At this juncture, it was enquired by the bench as to whether the assessee has preferred appeal before Hon ble Delhi High Court against the tribunal s order in the earlier years. It was submitted by the Ld.AR of the assessee that appeals are pending before Hon ble Delhi High Court. Under this situation, we feel it fit and proper to decide this issue against the assessee by following various decisions of the tribunal in the earlier years in assessee s own case. Accordingly, this ground of the assessee is rejected. 2. Ground no.2 of the appeal reads as under: That the Commissioner of Income-tax (Appeals) erred on facts and in law in confirming disallowance of provisions for obsolete stores written off amounting to ₹ 24.38. 3. It was submitted by the Ld.AR of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in favour of the assessee on the basis that the assessee has made provision for diminution of value of stock. This is allowable because stock is to be valued at cost or market price, whichever is lower. In view of this judgment of Hon ble Delhi High Court, we feel it fit and proper that this aspect of the matter has to be decided in favour of the assessee. Regarding the second aspect i.e. non-consideration of scrap value of obsolete items as a value of closing stock, we feel that for this reason, the entire amount cannot be disallowed and the disallowance has to be restricted to the extent of scrap value of the obsolete items, but since the same is not available on record, we feel it fit and proper to restore this matter to the file of the Assessing Officer for fresh decision after ascertaining the scrap value of the obsolete items in question and addition has to be restricted to that extent only. This ground of the assessee is allowed for statistical purpose. 5. Ground no.3 of the appeal reads as under: That the Commissioner of Income-tax (Appeals) erred on facts and in law in confirming disallowance of prior expenses amounting to ₹ 15.38 lacs. 6. It is sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent year then on the same logic, previous year income is also not assessable in the present year and both of them should be considered in the relevant year. Since, the Assessing Officer has already assessed previous year income in the present year, we find no reason to disallow the claim of the assessee regarding previous year expenses since these expenses are lesser than such incomes, but at the same time, this has to be seen as to whether such previous year expenses are otherwise allowable or not because we have noted that some of the expenses are on account of penalty and some of the expenses are infrastructure expenses which may not to be found otherwise allowable. We, therefore, set aside the order of the Commissioner of Income-tax (Appeals) on this issue and restore this matter back to the file of the Assessing Officer for fresh decision. The Assessing Officer should examine the nature of these expenses and the same should be allowed if it is found that these expenses are otherwise allowable. This ground of the assessee is allowed for statistical purpose. 8. Ground no.4 of the appeal reads as under: That the Commissioner of Income-tax (Appeals) erred on facts and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i High Court, if the asset in question on which expenses were incurred does not belong to the assessee, it cannot be held that the expenditure is capital in nature. In the present case also, it is seen that as per the agreement, service line is the property of the supplier and not of the assessee. In the light of these facts, we are of the considered opinion that this judgment of the Honb le Delhi High Court cited by the Ld.AR of the assessee squarely covers the present issue in dispute in favour of the assessee. We, therefore, delete this disallowance. This ground of the assessee is allowed. 12. Ground no.5 of the appeal reads as under: That the Commissioner of Income-tax (Appeals) erred on facts and in law in confirming the disallowance of deduction for repossession charges amounting to ₹ 12,00,000. 13. It was submitted by the Ld.AR of the assessee that the assessee had given its godown space on rent to one M/s Associated Tubewells and the same was given in the year 1956. It is also submitted that the repossession charges of ₹ 12 lakhs were paid through sugar unit to the said firm to vacate the space. It is also submitted that this payment was made as a m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l expenses incurred by the assessee to retain possession of lands worked as saltpans. The issue in dispute before us is different and hence this judgment is not applicable in the present case. 18. Now, we consider the judgment of Hon ble Allahabad High Court rendered in the case of CIT vs. Muir Mills Co. Ltd.(supra). In this case also, the issue involved was about litigation expenses and hence this judgment is also not applicable in the present case because the facts are different. 19. Lastly, we consider the judgment of Hon ble Madras High Court in the case of State of Tamilnadu vs. C.M. Simpson(supra). In this case also, the issue involved was regarding legal expenses to establish title to land and since the facts are different, this judgment is also not applicable in the present case. 20. Since the judgments cited by the Ld.DR of the revenue squarely covers the issue in this case, we decide this issue by following these judgments. This ground of the assessee is rejected. 21. Ground no.6 of the appeal reads as under: That the Assessing Officer erred on facts and in law in not specifying that the brought forward unabsorbed business losses and unabsorbed depreciati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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