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2016 (5) TMI 1087 - ITAT DELHI

2016 (5) TMI 1087 - ITAT DELHI - TMI - Addition on account of sales returns/warranty scraped at customers end - Held that:- The goods at the customers end who scrapped out the same and the assessee receives the net consideration. In this regard, the assessee had furnished confirmation from M/s. Vee Three North America, USA. After verifying the explanation of the assessee, the Learned CIT(Appeals) found that certain items which were shown as sales return, not shown in RGI registers at the end of .....

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oods returned by them. Since necessary confirmation was also furnished by the assessee in support, we are of the view that the Learned CIT(Appeals) was justified in deleting the addition in question - Decided against revenue

Addition made on account of excess depreciation on certain assets - Held that:- The claimed depreciation of the assessee was based upon its submission that it had not only installed but had also put to use the assets purchased in March 2009, which were considered .....

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ing the disallowance made on account of claimed depreciation. The same is upheld.- Decided against revenue

Disallowance made under sec. 14A - Held that:- As per provisions of sec. 14A(2), the Assessing Officer was firstly required to record his dissatisfaction with the working of the assessee with cogent reason. The Learned CIT(Appeals) found that the assessee itself had made disallowance through the mechanism of Rule 8D in its return of income as per the details furnished before him. .....

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wance under Rule 8D(2))(ii) interest expenses of ₹ 3,88,932 alone is to be considered. He observed further that for the purpose of average investment, an amount of ₹ 71 lacs which was towards making investment resulting in taxable income are also to be excluded. He accordingly worked out disallowance under sec. 14A at ₹ 2,49,843 giving relief of ₹ 1,03,912 in this regard to the assessee. We thus find that the first appellate order on the issue is comprehensive and reasone .....

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₹ 3,03,859 made on account of excess depreciation on certain assets; and (iii) ₹ 1,03,912 made under sec. 14A of the Act. 2. Heard and considered the arguments advanced by the parties in view of orders of the authorities below, material available on record and the decisions relied upon. 3. Ground No.1: In support of this ground, the Learned Senior DR has basically placed reliance on the assessment order. He submitted that the assessee company is engaged in the manufacturing and sale .....

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the requirements of Central Excise Act, the Assessing Officer allowed sales returns to the extent of ₹ 55,33,848 recorded in such registers and sales to the extent of ₹ 40,26,720 not recorded in the said register was not allowed as sales return. Without appreciating this material fact, the Learned CIT(Appeals) has deleted the addition. The Assessing Officer was justified in not accepting the explanation of the assessee in respect of such sales that recording in the books was not mad .....

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n at their end and destruction of goods by them in USA at their premises. It was submitted that total sales return of ₹ 40,26,720 comprised of ₹ 33,96,942 on account of material and ₹ 6,29,778 for other items not relating to sales return. The Learned AR submitted that such a practice is not unusual and even in the case of assessee there were instances when such a claim was made in earlier years also, where goods that were rejected were not physically received back by the assess .....

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rn were not available in the RGI registers as maintained under the Central Excise Duty Act. The explanation of the assessee in this regard remained that sometimes when the cost of shipping back the goods returned by the customer particularly for overseas party, is high, they leave the goods at the customers end who scrapped out the same and the assessee receives the net consideration. In this regard, the assessee had furnished confirmation from M/s. Vee Three North America, USA. After verifying .....

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that as a prudent businessman, the assessee considered it appropriate to not incur freight expenses and instead allowed the overseas customers to scrap the goods returned by them. Since necessary confirmation was also furnished by the assessee in support, we are of the view that the Learned CIT(Appeals) was justified in deleting the addition in question. The same is upheld. The ground No.1 is accordingly rejected. 6. Ground No.2: In support of this ground, the Learned Senior DR placed reliance .....

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depreciation of the assessee was based upon its submission that it had not only installed but had also put to use the assets purchased in March 2009, which were considered as not having been used by the Assessing Officer while making the disallowance in question. The Learned CIT(Appeals) has, however, deleted the disallowance as the claim of user of the assets purchased in March 2009 was supported by copies of bills, GRN, PRR showing the testing and use of the assets. It was also submitted that .....

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014 dated 11.2.2014 clarifying the position regarding disallowance of expenses under sec. 14A of the Income-tax Act, 1961 in cases where corresponding exempt income has not been earned during the financial year. The Learned Senior DR tried to justify the action of the Assessing Officer in making the disallowance under sec. 14A of the Act in question. 10. The Learned AR on the other hand placed reliance on the first appellate order with this further submission that the issue is also covered by th .....

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a finding as to the fact that he is not satisfied with the correctness of amount of expenditure incurred for earning exempt income. 11. Having gone through the orders of the authorities below, we find that in its return of income, the assessee itself had disallowed an amount of ₹ 1,59,410 towards the expenses incurred for earning the dividend income. The Assessing Officer, however, was of the view that the assessee has not made disallowance in a reasonable manner to ascertain the true and .....

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