TMI Blog2011 (1) TMI 1554X X X X Extracts X X X X X X X X Extracts X X X X ..... red in confirming the addition of ₹ 15,18,344/- on account of expenditure incurred on repairs of building made by the AO, which is contrary to the facts of the case and is not as per the applicable provisions of the Act; 4. The ld. CIT(A) erred in confirming taxing of revenue expenditure as capital expenditure by the AO of ₹ 68,859, since it is contrary to the facts of the case and is not as per the applicable provisions of the Act 3. Grounds of appeal no.1, regarding the disallowance made by the AO, on account of Bad debts amounting to ₹ 7,75,000/-. During the course of assessment proceedings, the AO noticed that the assessee has debited an amount of ₹ 7,75,000/- in the profit and loss accounts in respect of the bad debts written off. Accordingly, the AO issued show cause notice calling upon the assessee to furnish the details regarding the bad debts written off. The assessee vide letter dated 4.08.2006 submitted that the assessee during the year has written off an inter corporate deposit of ₹ 7,75,500/- which the assessee had placed with M/s Pittie Cement Ltd. The ICD had been placed several years back. For the past several yeas, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealing in computer data processing, printing, registrar and share transfer agent, computer software development and export of IT enabled services. The money advanced to M/s Pittie Cement Ltd is not under the ordinary course of business of the assessee, therefore, the claim of bad debts cannot be allowed in view of the provisions of section 36(1)(vii) r.w.s.36(2) of the IT Act. He has relied upon the orders of the lower authorities. 8. We have considered the rival contentions and relevant record. It is undisputed fact that the assessee s main business is in computer data processing, printing, registrar and share transfer agent, computer software development and export of IT enabled services. Merely because the assessee is permitted by its Memorandum of Association to give inter corporate deposits / loans does not ipso facto change the nature of the isolated transactions of inter-corporate despots. It is evident from the record that the assessee is not regularly advancing the loan under inter corporate despots but these are the some isolated transactions which cannot be treated as regular and primary business activity of the assessee. These inter corporate deposits are mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement ltd cannot be treated as incidental to business because the appellant company has not submitted any evidence to prove that it has shown interest income earned from this advance as business income before the AO and before me. Thus, the facts of this case are distinguishable to the decision relied upon of the appellant, therefore, it will not helpful to the company Secondly, the alternative plea of the appellant that it may be allowed the deduction u/s 37(1) is also not acceptable because the expenditure is not wholly and exclusively incurred for the purpose of business. Keeping in view all the facts and circumstances, I am of the view that the AO has rightly disallowed ₹ 7,75,000/- Thus the order of the AO is confirmed and ground of appeal is dismissed. 9. The AO as well as the CIT(A) have given the findings of the fact that the money advanced by the assessee by way of ICD is not a regular business of the assessee and the assessee is not engaged in the business of money lending and we do not find any error in the orders of the lower authorities. Accordingly, we confirm the orders of the AO and CIT(A). This issue is decided against the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 15,84,344/- was shown as expenditure incurred towards the repair of the building. However, the AO has not made any addition on this account. So far as, the depreciation of ₹ 3,46,528/- is concerned, I am fully agree with the AO that it is not allowable for he income computed under the head income from house property as per the section 24 of the Act. Thus, the addition made by the AO is confirmed. Secondly, the AO has made addition of ₹ 154,688/- on account of notional rent of vacant flats no. C106 and C107 on the basis of assessment year 2003-04. I have perused the order of the ld. CIT(A) and hon. Tribunal of the AY 2003-04. This ground was not contended before the appellate authority. It shows that the appellant company has accepted this addition made for the AY 2003-04. keeping in view this fact, the decision of the AO fro making this addition as notional rent of the vacant flat is upheld. 14. From the findings of the CIT(A), it is clear that the assessee has no case in respect of the claim of depreciation as well as notional rent. Accordingly, ground no.2 is dismissed. 15. The third grounds of appeal is regarding, confirmin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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