TMI Blog2017 (8) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... He also held that the payment is business expenditure as it is paid by way of salary or remuneration to the employees. Similarly he set aside the disallowance for the purpose of verification of the assessing Officer in case if the total amount of expenditure on subsistence allowances not related to the previous year and then to make disallowance of the expenditure to that extent, if it is related to the earlier years. DR could not point out any quantification made by the Ld. AO about the amount expenditure related to previous year and earlier years. Therefore when the assessment order does not mention about the vouchers and declaration which are pertaining to earlier years, then in that case that verification needs to be done by the A.O. o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s depreciation under Section 32(2) is to be set off. As deduction under Section 10A has to be excluded from the total income of the assessee the question of unabsorbed business loss being set off against such profit and gains of the undertaking would not arise. Appeal of the assessee is allowed. - ITA NO. 3264/DEL/2013 And ITA NO. 3672/DEL/2013 - - - Dated:- 9-12-2016 - SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SMT SUCHITRA KAMBLE, JUDICIAL MEMBER For The Appellant : Sh. Gaurav Garg, CA For The Respondent : ORDER PER SUCHITRA KAMBLE, JM This appeal is filed against the order dated 27/12/2010 passed u/s 143(3). First we will take up Revenue s appeal wherein the issue is related to deletion of ₹ 18,04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 009-10 which is a subsequent years, the ITAT Delhi Bench held both the issues in favour of the assessee and against the revenue. The ITAT held as under: 29. On perusal of the above decision it is apparent that the 1st appellate authority has considered the provisions of Section 195 of the income tax act and held that this payment of subsistence allowance is only a reimbursement of expenditure which is not chargeable to tax in India and hence no withholding tax was required to be deducted from such payment and hence provisions of section 40a(i) does not apply. Even otherwise he held that such payment of subsistence allowance if not fully spent for the official purposes of the employees then it would be chargeable to tax in the hands o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the expenditure to that extent, if it is related to the earlier years. Ld. Departmental representative could not point out any quantification made by the Ld. AO about the amount expenditure related to previous year and earlier years. Therefore when the assessment order does not mention about the vouchers and declaration which are pertaining to earlier years, then in that case that verification needs to be done by the A.O. only, hence there is no infirmity in the order of Ld. CIT(A) in directing ld. AO to verify the claim of the assessee form that aspect and quantify the disallowance, if any. In view of this, we confirm the order of the first appellate authority deleting the disallowance of subsistence allowance expenses and dismiss grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 72(2) clearly set out that the allowance should be given first effect. Set off depreciation in any manner can be utilized and thus it loses characterizing business. The Ld. AR submitted that order of KEI Industries does not apply in the present case. The Ld. AR also relied upon the orders of ITAT Delhi Bench in case of DCIT Vs. NIIT Ltd. (ITA No. 1112/Del/2012 dated 08.05.2015) and CIT Vs. TEI Technologies (P.) Ltd. 361 ITR 36 of Hon ble Delhi High Court. 10. We have heard both the sides, the reliance of Hon ble Karnataka High Court judgment in case of Yokogawa India Ltd. clearly makes point that how the set off of unabsorbed depreciation has to be taken into account. As the income of the Section 10A unit has to be excluded at sour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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