9911796707
TMI Blog2020 (6) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... vely, passed u/s 250(6)) of the Income Tax Act, 1961 (hereinafter referred to as 'Act'. 2. At the outset itself, the Ld.Counsel for the assessee drew our attention to the fact that a fire had broken out at its premises at plot No.196, Phase-I, Industrial Area Panchkula on 13.06.2013 in which all stock, machinery, all its equipments, furniture, computers software and all documents relating to sale, purchase, assets and liabilities were destroyed. That during assessment proceedings for the impugned year this fact was brought to the notice of the AO also. He further drew our attention to the copy of the fire report issued by the Fire Station Officer Panchkula on 21.6.2013 confirming the occurrence of fire at the assessee' premises. The Ld. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g additions: a.) Disallowance of earnest money deposit written off of Rs. 73,33,358/-. b.) Disallowance of Rs. 16935691/- on account of depreciation on technical know-how." 4. The Ld.Counsel for the assessee contended that the disallowance of prior period expenses, foreign exchange fluctuation and earnest money deposit had been made and confirmed since the assessee was unable to substantiate its claim with evidence. Referring to the facts of each disallowance he pointed out that in assessment year 2011-12 the AO had noted from the tax audit report furnished by the assessee that the assessee had claimed prior period interest of Rs. 16,63,027/- on loan against property in its Profit & Loss Account and had accordingly disallowed the same. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t money deposit made by the assessee against the tenders applied for and which had become irrecoverable and thus written off, in the absence of any evidence to substantiate the same. The Ld.Counsel for the assessee contended that considering the fact that a major fire had destroyed all documents available with the assessee it was factually impossible for the assessee to substantiate its explanation with evidence. The Ld.Counsel for the assessee contended that the assessee is in the process of obtaining whatever possible evidence it can possibly now in the form of bank statements to substantiate its explanation of interest having been paid to banks and thus being allowable u/s 43B of the Act,of exchange fluctuation loss being on account of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar was placed before us at page Nos.46 to 56. The Ld.Counsel for the assessee contended that the AO, on the other hand, had rejected the claim of the assessee that its R & D expenditure were capital in nature and had treated the same to be a revenue in nature and accordingly allowed the claim of entire R & D expenses incurred in the year but had disallowed the assessee's claim of depreciation on the written down value of the technical know-how as at the beginning of both the years. The Ld.Counsel for the assessee pointed out that the only reason for doing so was that the Revenue Authorities noted that the assessee did not have any patents, was only in the business of assembling machinery and there was, therefore, no expenditure on any asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and write off of earnest money deposit in assessment year 2012-13. We, therefore, restore the issue back to the AO to consider the issue afresh after giving due opportunity of hearing to the assessee. Ground of appeal No.1(a) & (b) in ITA No.653/Chd/2017 and ground of appeal No.1(a) in ITA No.654/Chd/2017 are, therefore, allowed for statistical purposes. 8. As for ground of appeal No.1(c) in ITA No.653/Chd/2017 and ground of appeal No.1(b) in ITA No.654/Chd/2017 relating to disallowance of depreciation on technical know-how we are unable to fathom what the Revenue was attempting to do on the issue. Undoubtedly, the Revenue has not disputed the genuineness of the claim of expenses. It is not the Revenue's case that the impugned expenses wer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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