TMI Blog2018 (6) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim with proper evidence, we do not find any reason to interfere with the orders of the lower authorities - Decided against the assessee. Disallowance of prior period expenditure - Held that:- It is not disputed that the expenditure did not relate to the impugned assessment year - hence, in our opinion, the claim was rightly disallowed - we therefore find no reason to interfere with the orders of the lower authorities - Decided against the assessee. Lease rent deposits which were written off were and disallowed as expenditure - Held that:- following the decision of Delhi Bench of the Tribunal in the case of Fab India Overseas P. Ltd vs. CIT [2013 (9) TMI 301 - ITAT DELHI] where it is held that security deposits which were written off were given for a lease which never went through. The Tribunal had held that there was no binding agreement between assessee and the lessor, since the lease deed was not registered and held that security deposit written-off was a business loss. However, in the case before us, there is nothing on record to show that rental deposits written off by the assessee pertained to any lease which had not materialized - hence we do not find any reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss. - I.T.A. Nos.1223, 1224, 1225, 1226, 1227 & 1228/CHNY/2015 - - - Dated:- 12-6-2018 - Shri N.R.S. Ganesan, Judicial Member And Shri Abraham P. George, Accountant Member Appellant by : Shri. S. P. Chidambaram, Adv Respondent by : Shri. AR.V. Sreenivasan, JCIT ORDER Per Abraham P. George, Accountant Member These are appeals filed by the assessee directed against orders dated 19.03.2015 of ld. Commissioner of Income Tax (Appeals)-15, Chennai, for the impugned assessment years. 2. Ld. Counsel for the assessee submitted that he was pressing only those grounds which were listed by him in the chart filed. As per ld. Counsel grounds if any, apart from those mentioned in the chart were supportive in nature and the issues involved stood covered by the grounds listed in the chart. Accordingly, we restrict ourselves to the grounds depicted in the chart furnished by the ld. Authorised Representative. 3. Appeal of the assessee for assessment year 1999-2000 in ITA No.1223/CHNY/2015 is taken up first for disposal. 4. Ld. Counsel for the assessee submitted that this appeal emanated from an order passed by the ld. Assessing Officer, pursuant to the directions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guarantees. However, assessee could not substantiate this claim before the lower authorities despite opportunities given to it. Ld. Commissioner of Income Tax (Appeals) had relied on the judgment of Hon ble Jurisdictional High Court in the case of Dollar Apparels vs. ITO, 294 ITR 484, confirming the disallowance. Since assessee was unable to support the claim with proper evidence, we do not find any reason to interfere with the orders of the lower authorities. Ground No.4 of the assessee stands dismissed. 10. Now, we take up the appeal of assessee for the assessment year 2002-03 in ITA No.1224/CHNY/2015. 11. First effective ground appearing as ground No.2 in the chart is on disallowance of prior period expenditure of 718,33,815/-. 12. We have heard the contentions of the ld. Counsel. Assessee had claimed prior period expenditure of 718,33,815/-. Ld. Assessing Officer had disallowed the claim since expenditure related to an earlier year, and did not relate to the previous year relevant to impugned assessment year. Contention of the assessee before ld. Commissioner of Income Tax (Appeals) was that such expenditure was incurred wholly and exclusively for the purpose of busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f credit given in monthly or bi- monthly bills raised by the MTNL as per the Indian Telegraph Rules framed under the Indian Telegraphs Act and only a certain percentage, just to say 4% of the total deposit is charged as book keeping charges. Therefore, the Earnest money deposited with MTNL cannot be treated as irrecoverable advances and thereby cannot be treated as bad debts. As regards to the other expenses by examining the nature of expenses, it is clear that these expenses were incurred I By the assessee on behalf of its customers with whom the assessee was doing business and therefore the same was incurred in the course of ordinary business of the assessee and allowable as expenditure / business loss. Accordingly, we hold that except the Earnest Money with the MTNL, other claims of the assessee is written off being bad debts are allowable. Hence, the Revenue partly succeeds, qua this issue . A reading of the above, clearly show that amount which was written in the said year was earnest money deposit with the MTNL and other claims incurred on behalf of its customers. No part of the claim was on any write off of rental deposits. That apart, the EMD written off was not allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned assessment year. Ordered accordingly. Ground No.4 of the assessee is treated as partly allowed for statistical purposes. 19. Now, we take up appeal of the assessee for assessment year 2003-04 in ITA No.1225/CHNY/2015. 20. Effective ground No.2 of the assessee is on share issue expenditure of 711,31,421/- which was disallowed by the lower authorities. This is similar to the ground No.2 raised by the assessee for the assessment year 1999-2000 in ITA No. 1223/Mds/2015. We have already confirmed the order of the ld. Commissioner of Income Tax (Appeals) in para 5 above. Fact situation being the same, ground No.2 of the assessee for assessment year 2003-04 is also dismissed. 21. Vide its effective ground No.4, grievance raised by the assessee is on disallowance of expenditure of 71,17,866/- claimed as incurred for improvement of leasehold property. 22. We have considered the rival contentions and perused the orders of the authorities below. Assessee had claimed 100% depreciation on expenditure of 71,17,866/- incurred for improvement of leasehold premises. However, ld. Assessing Officer allowed the claim only to the extent of 10% being rate of depreciation applicable for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment is made to Life Insurance Corporation of India and it is not a provision in the books of accounts. Hence, the learned Commissioner of Income Tax (Appeals) held that the amount paid represents payments made to Life Insurance Corporation of India as per the scheme administered by them and as Life Insurance Corporation of India is an approved institution for maintaining gratuity funds, he directed the Assessing Officer to allow the claim of deduction for payments of gratuity. 4.2 We have heard both the counsels and perused the relevant records. We find that matters that payments were made to Life Insurance Corporation of India are not emanating from Assessing Officer's order. Hence, we remit this issue to the file of the Assessing Officer to examine the facts and grant necessary relief to the assessee if the provision represents payments made to Life Insurance Corporation of India. The assessee should be given adequate opportunity of being heard . It is not disputed that the payments were effected by the assessee to LIC under a scheme for ensuring gratuity to its employees. No doubt, this Tribunal had for assessment year 2002-03 remitted the issue back to the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non deduction of items excluded from export turnover, from total turnover also while working out relief available u/s.10A of the Act. By virtue of the judgments of Hon ble Karnataka High Court in the case Tata Elxsi Ltd (supra) and that of Hon ble Apex Court in the case HCL Technologies Ltd (supra), exclusions made from export turnover have to be considered for reduction from total turnover also while working out deduction available u/s.10A of the Act. Accordingly, we direct the ld. Assessing Officer to rework the deduction available to the assessee u/s.10A of the Act. Ground No.1 of the assessee stands allowed. 35. Vide its effective ground No.2, grievance raised by the assessee is on a denial of its claim for deduction of 74,07,15,784/- u/s.10A of the Act for its STPI units. 36. Ld. Counsel for the assessee submitted that ld. Assessing Officer had set off the loss from one STPI unit with the profit of another STPI units, before allowing the deduction claimed by the assessee u/s.10A of the Act, on the latter. According to him, such set off of profit /loss between two units could not be done, since deduction u/s.10A of the Act was to be given on a stand alone basis. Reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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