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2016 (3) TMI 926 - ITAT MUMBAI

2016 (3) TMI 926 - ITAT MUMBAI - TMI - Disallowance of advertisement expenses as prior year's expenses - Held that:- There is no dispute that the related invoices are issued at the fag end of preceding previous year. The point of dispute really is as to the point of time when these invoices were served upon the assessee. The liability for payment would crystallise, so far as the assessee is concerned, when the bills are received by the assessee. As there is no finding on this aspect, and with th .....

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bad and unrecoverable, is concerned, the matter is now settled, in favour of the assessee, by Hon'ble Supreme Court in the case of TRF Limited vs. CIT [2010 (2) TMI 211 - SUPREME COURT]. As long as the assessee has actually written off the debts, which is not even in dispute before us, the assessee is eligible for deduction under section 36(1)(iii). That leaves us with only two amounts i.e. ₹ 12,00,000/- as advance given for buying the office and ₹ 12,750/- given as house rent advanc .....

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llowance being 1/10th Global Depository Receipts - whether the GDR is nothing but increase in the capital and expenses relating to the same is capital in nature? - Held that:- what the Assessing Officer has overlooked is that there is no bar on capital expenses being amortised under section 35D. Section 35D deals with amortisation of expenses over a period of ten years and such an amortisation is not dependent upon the expenses being revenue in nature. Section 35D(2)(iv) categorically deals with .....

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n indeed be amortised under section 35D(2)(iii) and that is not even the claim of the assessee before us. - Decided in favour of assessee - ITA No. 3624/Mum/2002, ITA No. 3541/Mum/2002 - Dated:- 29-2-2016 - Pramod Kumar, AM And Pawan Singh, JM For the Appellant : Alok Johri For the Respondent : Hiro Rai ORDER Per Pramod Kumar AM, 1. These cross appeals challenge correctness of the learned CIT(A)'s order dated 8th February, 2002, in the matter of assessment under section 143(3) of the Income .....

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quot;On the facts and in the circumstances of the case the learned CIT(A) has erred in confirming the disallowance of prior year's expenses of ₹ 87,58,803/-. He ought not to have done so." (ii) Ground no.10 of the assessee's appeal relating to disallowance of bad debts. This ground is reproduced below : "On the facts and in the circumstances of the case the learned CIT(A) has erred in disallowing your appellants claim for write off of small debit balances aggregating to & .....

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ithout appreciating that the Global Depository Receipts is nothing but increase in the capital and the expenditure related to the same is capital in nature". 2. We will take up these grounds of appeal one by one. 3. As regards ground of appeal no.6, filed by the assesse, is concerned, it is directed against the disallowance of ₹ 87,58,803/- as prior year's expenses. 4. So far as this grievance of the assessee is concerned, only a few undisputed material facts need to be taken note .....

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s per mercantile method of accounting that the assessee is pursuing. The Assessing Officer, however, declined the deduction on the ground that these expenses pertained to prior period, and, for this reason, deduction could not be allowed in this year. Aggrieved, assessee carried the matter in appeal before the learned CIT(A) but without any success. Learned CIT(A) noted that the dates on which bills have been issued are dates "ranging from 17th March to 31st March 1997" which fell outs .....

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es were served upon the assessee. The liability for payment would crystallise, so far as the assessee is concerned, when the bills are received by the assessee. As there is no finding on this aspect, and with the consent of the parties, the matter is remitted to the file of the Assessing Officer for fresh adjudication, in the light of our directions and observations as above, after giving yet another opportunity of hearing to the assessee on this point, in accordance with the law and by way of a .....

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write off included ₹ 12,00,000/- which represented amount of advance of ₹ 12,00,000/- to M/s. S.S. Enterprises which had to be written off. The authorities below declined this deduction on the ground that it did not pertain to trading, and not pertain to trading, and was for the purposes of buying an office, and as such, it was a capital loss. The same was the position with respect to house rent deposit of ₹ 12,750/- given to one Mr. Mehta. Finally, an amount of ₹ 69,264 .....

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unts have actually become bad and unrecoverable, is concerned, the matter is now settled, in favour of the assessee, by Hon'ble Supreme Court in the case of TRF Limited vs. CIT [(2010) 323 ITR 397 (SC)]. As long as the assessee has actually written off the debts, which is not even in dispute before us, the assessee is eligible for deduction under section 36(1)(iii). That leaves us with only two amounts i.e. ₹ 12,00,000/- as advance given for buying the office and ₹ 12,750/- given .....

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hus allowed. 12. We now take up ground no.6 of the Assessing Officer i.e. grievance against disallowance of "Rs.53,74,474/-, being 1/10th of ₹ 5,37,44,740/- incurred by the assessee on Global Depository Receipts, without appreciating that the GDR is nothing but increase in the capital and expenses relating to the same is capital in nature" 13. So far as this grievance of the Assessing Officer is concerned, only a few undisputed material facts need to be taken note of. During the .....

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in books of accounts". The Assessing Officer further noted that these expenses are capital in nature, as held by the Hon'ble Supreme Court in the case of Punjab State Industrial Development Corporation Limited vs. CIT (225 ITR 792) and Brooke Bond India Limited vs. CIT (225 ITR 798). The claim of deduction was, accordingly, disallowed. In appeal, however, learned CIT(A) allowed the claim of the assessee by observing as follows :- "Ground no.16 On the facts & circumstances of t .....

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relevant to A.Y. 97-98. They have further submitted that the company has issued shares in the international market which have been purchased by the persons of various countries abroad. They have, therefore, submitted that this claim is covered under the provisions of section 35D of the I.T. Act and on that basis, 1/10th portion has been claimed as expenditure for each assessment year. 18.1 Considering the facts and arguments of the case, I am also of the view that this is the expenditure covere .....

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