TaxTMI 
TaxTMI 
2015 (9) TMI 1731
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.... 3. The Revenue's first substantive ground in its appeal challenges the lower appellate order deleting section 37(1) addition of Rs. 176.28 lacs made on account of disallowance claim of financial loss under the schedule "repair and maintenance expenses". It is to be seen that the CIT(A)'s findings comprise of Assessing Officer's observations and assessee's submissions as under:- "4. Ground No.3 of appeal is regarding disallowance of financial loss of Rs. 1,76,28,000/- accounted during the year and incurred as a result of certain irregularities. Financial loss of Rs.176.28 lakh was charged by the appellant to profit and loss account under the head repairs and maintenance after noticing certain irregularities in certain divisions of the appellant company in the maintenance work carried out during the year. The concerned irregularities were disclosed at Sr.No.7 of Schedule-33/ Notes on Accounts forming part of balance sheet for the year ended 31.3.2008. It. was submitted that accounts of appellant company were verified and audited by the statutory auditors. Also the Comptroller and Auditor General of India (C&AG) gave his report on appellant company's accounts. Assessing Officer....
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....er, it is submitted that the criminal law requires the investing agency to seize the property involved in the crime as "muddamal", which is produced before the Trial Court as evidence. At the end of the trial, the Court passes order for disposal of the muddamal. Depending on the order of the Court the muddamal can be restored to the owner. That, however, is a long-drawn process and depends on the prosecution proving the crime and establishing the identity of the property and the owner. This apart, it is submitted that in the event of the amount involved in the fraud is recovered subsequently by the company, then obviously the said amount will be shown on the credit side of the Profit & Loss Account as income which will be taxed accordingly. Thus this can be considered a case similar to that of a Bad Debt written off in the books of account which is allowed in the year in which the same is written off. If, however, subsequently some amount is recovered out of the said Bad Debt already written off then the said amount is to be treated as income. But there is no law to disallow the bad debt written off merely on the ground that some amount may be recovered in subsequent years. In vi....
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....terates its grounds and assails the above extracted findings by pleading that details of evidence had not been filed in the course of assessment. We notice that the CIT(A)'s findings under challenge duly take into account details of loss as in schedule 33 to notes on accounts with all necessary particulars of irregularities in question, division-wise break-up, work orders, bills involved, items selected for verification and actual work carried out. It has come on record that this assessee is already subjected to C & AG audit. Needless to say, the CIT(A) has already concluded that in case there is any amount recovered in future from the concerned contractor, it shall be treated as assessee's income in the year of receipt. The Revenue fails to file any evidence to the contrary for rebutting the above stated factual findings. We do not see any reason to interfere in the lower appellate findings. This Revenue's ground is rejected. 5. The Revenue's second substantive ground assails correctness of the lower appellate order deleting addition of Rs. 124.8 lacs made on account of disallowance of extra ordinary items being losses due to cyclone, flood and fire etc made for want of supportiv....
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....f PVC Unarmoured Cables of different sizes 2.53 lacs 3. Replacement of RSJ Girder 116x100x11 mtr Long 16.21 lacs 4. Repair charges of transformers of different sizes 12.44 lacs 5. Other expenditure (related to replacement of GI stay wires, Meters, meter boxes, Shackle Insulators, Kit kat fuses, Pin Insulators, Stay Clamps for Poles, etc ). 11.28 lacs It is further submitted that at the time of natural calamity like earthquakes, cyclone, floods, fire etc., the company being a public utility undertaking has to incur expenditure immediately for restoration of power. For the purpose the loss incurred due to the' calamity as well as the expenditure on repairs etc., is estimated. On the basis of estimate, the company represent to the Government of Gujarat for subsidy/grant against the loss on account of flood, cyclone, fire, etc. It can be seen from the Annual Accounts that the company had received a grant/subsidy from the Government amounting to '1789.94 lacs against losses on account of Floods in the immediately preceding year in which heavy floods were there. The said subsidy was shown by the company as other income in Schedule -20 of the Annual Accounts. Thus it i....