TMI Blog2016 (7) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of section 36(2) of the Act. There is no dispute that the claim of the assessee could not be allowed as a bad debt in the light of the provisions of section 36(2) of the Act but nevertheless the claim is justified as a business loss. Since both these amounts are directly related to the business of the assessee, therefore, the claim of business loss cannot be brushed aside lightly. We accordingly set aside the findings of the ld. CIT(A) and direct the A.O. to delete the addition - Decided in favour of assessee - ITA. No: 1590/AHD/2013 & C.O. No. 187/AHD/13 - - - Dated:- 7-6-2016 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER For The Appellant : Shri P.M. Mehta with G.M.Thakor, A.R. Fo The Respondent : Shri Kamlesh Makwana, Sr. D.R. PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. This appeal by the Revenue and Cross Objection of the Assessee are directed against the very same order of the Ld. CIT(A)-XIV, Ahmedabad dated 20.03.2013 pertaining to A.Y. 2009-10. 2. The appeal and the cross objection were heard together and are being disposed of by this common order for the sake of convenience. ITA No. 1590/Ahd/2013 Revenue s Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to contract with the parties who are into the business of exploration of oil gas in field. On the basis of certification by the assessee, such parties use their assets for Oil Gas exploration, without these, such companies cannot use the machines for exploration. For giving the certification, the assessee company uses certain machinery, which is used exclusively for the above purpose. Accordingly, we submit that the machineries used by the assessee are in relation to oil gas exploration and eligible for claiming depreciation @ 60%. At this juncture, we draw your good selves attention to the recent judgment of Delhi High Court in case, of CIT - IV, Delhi vs. M/s. HLS India Ltd, (copy enclosed herewith as Annexure - 2), wherein the court held as under: 49. Having decided the issue in the aforesaid terms, we may take liberty to look into this issue from a different point of view. Depreciation allowance is a land of tax benefit which is given to the business concerns for promotion of business activities in any particular field of business. In the instant case depreciation is allowable to mineral oil concerns @ 100% on the equipments used below the earth surface. If th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled for higher rate of depreciation and accordingly restricted the claim of depreciation to 15%. 6. Assessee carried the matter before the ld. CIT(A) and reiterated its claim. 7. During the course of the appellate proceedings, the assessee submitted photographs of the actual work executed on field of oil exploration to justify its claim that the actual work is being executed at field/rig level. It was pointed out that the plant machineries in the operation of ONGC operates with the testing work carried out by the assessee at particular oil field and such exploration work of ONGC is incomplete without the work of the assessee. After considering the facts and the submissions, the ld. CIT(A) was of the opinion that the ratio of the decision of Hon ble Delhi High Court given in the case of HLS India Limited 335 ITR 292 squarely apply on the facts of the present case and following the same. The ld. CIT(A) directed the A.O. to allow depreciation @ 60% thereby deleted the disallowance of ₹ 50,64,819/-. 8. Aggrieved by this, the revenue is before us. The ld. D.R. strongly relied upon the findings of the A.O. but could not bring any decision in favour of the revenue. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C.O. No. 187/Ahd/2013 for A.Y. 2009-10 11. The sole grievance of the assessee is that the ld. CIT(A) erred in confirming disallowances of ₹ 1,30,911/- and ₹ 1,26,500/- being Site Advances and Rent Deposits written off and claimed as business loss. 12. The facts of these disallowances are that while scrutinizing the return of income, the A.O. found that the assessee has debited bad debts written off amounting to ₹ 7,94,689/- . The A.O found that out of this, an amount of ₹ 1,30,911/- pertains to Site Advances and ₹ 1,26,500/- pertains to Rent Deposits. The assessee was asked to show cause why these amounts should not be disallowed. The assessee justified its claim by making the following submission. In the above mentioned point your good selves have asked the assessee to justify as to why site advance rent deposit should not be added to income of the assessee. In this connection, we submit that as regards to site advances, the same pertains to tender amount given by the assessee company during the bidding for getting the contract. The assessee company has to mandatory make the deposit for participation in the contract. We submit that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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