TMI Blog2022 (10) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has filed recovery proceedings by filing a suit before the Hon ble Madras High Court but that is pending. In the mean time, the assessee had made this claim of rental deposits as write off and claimed as allowable expenditure u/s.37(1). As the issue is exactly identical, respectfully following the Hon ble Madras High Court decision in the case of Pricol Ltd. [ 2021 (8) TMI 481 - MADRAS HIGH COURT ] we direct the AO to allow the claim of assessee. Appeals filed by the assessee are allowed. - ITA Nos. 101 & 102/CHNY/2021 - - - Dated:- 30-9-2022 - SHRI MAHAVIR SINGH , VICE PRESIDENTAND SHRI MANOJ KUMAR AGGARWAL , ACCOUNTANT MEMBER Appellant by : Shri R. Sivaraman , Advocate Respondent by : Shri AR. V. Sreenivasan , Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecovery proceedings initiated in December 2020, there was thorough scrutiny of income tax records and I state that as a consequence the non filing of the appeal was noticed. I state that after obtaining a copy from the Income Tax Department, the appeal was presented belatedly in the Registry of the Appellate Tribunal on 9.12.2020. I state that the mistake committed in the office of the Chartered Accountant would constitute reasonable cause for condoning the delay in filing the captioned appeal. Rest of the period falls under the Covid-19 pandemic exemption and hence, he requested that the delay be condoned. When this was confronted to ld. Senior DR, he only opposed condonation of delay. 2.1 After hearing both the sides and go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad paid a sum of Rs.2,89,42,376/- as rental advance. Since the required permission was not taken by owner of the land from SIPCOT, the lease was not finalised. The rental deposit was not returned back to the assessee, therefore the assessee had written off from the book. The ld.AO considering the assessee s submission stated it was a capital loss not revenue expenditure and therefore, the same is not allowable as deduction. Hence, the AO disallowed the amount of Rs.2,89,42,376/- and added to the total income. Aggrieved, assessee filed an appeal before the CIT(A). The CIT(A) confirmed the addition made by AO by observing as under:- The facts of the case have been carefully considered. The appellant paid a sum of Rs.2,89,42,376/- as rental ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant had written off the said advance from their books during the F.Y 2009-10. In other words, the appellant had written off the said amount even before the declaration of the decision of the High Court and the outcome of the arbitration proceedings. Furthermore, the advance pertains to a capital asset and therefore cannot be treated as a revenue expenditure. In the light of these material facts, the appellant s claim for deletion of disallowance of doubtful advances written off cannot be accepted. This ground of appeal is dismissed. Aggrieved, assessee is in appeal before the Tribunal. 5. We have heard rival contentions and gone through facts and circumstances of the case. We noted that the assessee company has claimed a sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Technologies Ltd. for leave and license operations to take over the operations of M/s.Terra Agro Technologies Ltd. for a period of 24 months with effect from January, 2001, with monthly lease rent of Rs.50 Lakhs. The assessee was able to carry on the business only for six months, i.e., upto July, 2001 only, and suffered loss and business could not be continued thereafter. Hence, the assessee wrote off the said security deposit paid to M/s.Terra Agro Technologies Ltd. as irrecoverable security deposit for the previous Assessment Year relevant to AY 2003~04. The Assessing Officer disallowed the return of income on the ground that it was not incurred in the course of the assessee-s business and it was a capital item reflected in the assessee- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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