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Before: Shri Duvvuru RL Reddy & Shri S. Jayaraman
O R D E R
PER DUVVURU RL REDDY, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 15, Chennai, dated 13.12.2019 relevant to the assessment year 2015-16 challenging the confirmation of addition of ₹.7,81,450/- under the head capital expenditure referable to impairment of assets.
Brief facts of the case are that the assessee has filed the return of income for the assessment year 2015-16 on 30.09.2015 admitting NIL income. Subsequently, the assessee filed revised return of income admitting NIL income after setting off earlier loses. The return filed by the assessee was selected for scrutiny and notice under section 143(2) of the Income Tax Act, 1961 [“Act” in short] was issued and served on the assessee. After considering the details filed by the assessee in response to the statutory notices, the assessment under section 143(3) of the Act was completed by assessing total income of the assessee at ₹.4,92,58,286/- after making various additions. On appeal, after considering the submissions of the assessee, the ld. CIT(A) partly allowed the appeal of the assessee by confirming the addition made under the head capital expenditure referable to impairment of assets.
On being aggrieved, the assessee is in appeal before the Tribunal. Against the confirmation of addition towards impairment of assets, by filing a petition for admitting additional evidences under Rule 29 of ITAT Rules, 1963 as well as additional grounds of appeal taking an alternative plea to the main grounds that the impairment loss is allowable and the claim can also be considered as obsolete allowance, the ld. Counsel for the assessee prayed for admitting the additional evidence as well as additional grounds. On the other hand, the ld. DR supported the orders of authorities below.
We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. In the assessment order, the Assessing Officer disallowed impairment of assets of ₹.7.81 lakhs on the ground that those expenses were related to capital assets and therefore cannot be allowed under section 37 of the Act. By following the decision of ITAT, Kolkata Bench in the case of Empire & Singlo Tea Ltd. vide & 927/Kol/2011, the ld. CIT(A) has held that the claim of deduction of ₹.7.81 lakhs as revenue expenditure towards impairment of capital assets was devoid of merits and confirmed the addition.
4.1 Before us, in support of an affidavit, the assessee filed a petition under Rule 29 of the ITAT Rules praying for admission of additional evidences in the form of certificate of impairment for audit purposes and also filed additional grounds of appeal taking an alternative plea to the main grounds of appeal that the impairment loss is allowable and the claim can also be considered as obsolete allowance for consideration. Since the above additional evidences as well as alternative plea by referring to the judgement of the Hon’ble Bombay High Court in the case of CIT v. Gigabyte Technology (India) Ltd. 421 ITR 21 were not placed before the first appellate authority while concluding the appellate order, we set aside the appellate order on this issue and remit the matter back to the file of the ld. CIT(A) to reconsider and decide the issue afresh in accordance with law after affording sufficient opportunities of being heard to the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on the 30th August, 2021 in Chennai.