TMI Blog2021 (6) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... e on the project and corresponding income of that project has already been offered for taxation. In view of this, the ld CIT(A) held that the above expenditure of the assessee is of revenue in nature and hence deleted the disallowances. We find that the assessee is a contractor, who according to terms of the contract was to acquire the land, create electricity infrastructure thereon and then handover the project after execution to Ministry of Home Affairs with respect to Indo Bangladesh border. The corresponding revenue received for execution of this work was already credited to the project income amount and taxed. The acquisition of land and payment of electricity charges were on account of above project and it did not create any asset in the hands of the assessee but assessee was merely a contract for construction of border outpost on behalf of Ministry of Home Affairs. We find that ld CIT(A) has correctly held that in the hands of the contractor, assessee the above expenditure was merely project expenditure and has note created any capital assets , hence, not a capital expenditure. Disallowances on account of provision of written back - AO made the addition holding that ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, the Ld.CIT(A) is legally justified in deleting disallowance of ₹ 2,72,49,141/- on account of bad - debts written-off even when the assessee had failed to prove that amount was actually trading liability and (In- corresponding amount was actually offered as income in earlier years and without considering'' the provisions of Section 36(l)(vii) and Section 36(2) of the Act? 2. Whether on facts and in circumstances of the case, the Ld.CIT(A) is legally justified in /deleting the addition of ₹ 2,72,49.141/- u/s 36(1) (vii) of the Act by ignoring the procedure prescribed by Hon ble Apex Court for write off an amount as irrecoverable in the case of I K! Ltd. vs. CIT (2010) 190 Taxman 391 (SC)? 3. Whether on facts and in circumstances of the case, the Ld.CIT(A) is legally justified in deleting disallowance of ₹ 113,50,15,591/- made by the Assessing Officer u/s 37 (1) of the Act by ignoring the fact that the assessee could not discharge its initial onus under section 37 (I) of die Act by not justifying that expenses incurred on land acquisition was of revenue nature? 4. Whether on facts and in circumstances of the case, the Ld. CIT(A) is le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of bad debts written off. Before the ld AO the assessee submitted unit wise details of such write off along with supporting evidences. The claim of the assessee is that debt is written off, it is taken into computation of income on earlier years, these amounts are 10 to 15 years old and amount was written off in the books of account and therefore, the claim is proper. The ld AO disallowed the above claim that the assessee has not produced the relevant details of old outstanding debts, therefore, he disallowed the same. The ld CIT(A) allowed the claim of the assessee following the decision of the Supreme Court in TRF Ltd Vs. CIT 323 ITR 397 holding that when the assessee has written off the above sum, debts are already taken into income in earlier years, it is allowable. Nothing new was argued by the ld DR and the ld AR also reiterated the arguments before the ld CIT(A). We find that when the assessee has written off a debt in its books of account, which was taken into computation of income in earlier years, it satisfied all the characteristic of allowable bad debt u/s 36(2) of the Act. In view of this we do not find any infirmity in the order of the ld CIT(A) in allowing the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see but assessee was merely a contract for construction of border outpost on behalf of Ministry of Home Affairs. We find that ld CIT(A) has correctly held that in the hands of the contractor, assessee the above expenditure was merely project expenditure and has note created any capital assets , hence, not a capital expenditure. Therefore, ground No. 3 of the appeal is dismissed, holding that expenditure of ₹ 113.50 crores incurred by the assessee on the project is revenue expenditure in the hands of the assessee. 10. Ground no. 4 is with respect to deletion of disallowances of ₹ 12,20,71,176/- on account of provision of written back. The ld AO made the addition holding that assessee has failed to give the information . Claim of the assessee is that above provision which is written back during the year cannot be charged to taxed for the reason that the year in which the provision was created , it was already disallowed and in that year the assessee did not claim the above provision as allowable expenditure. Thus, according to the assessee when the original provision was created it was not claimed as deduction but was disallowed in the computation of income itself. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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