Ashok Jyot Oxygen Pvt.Ltd., Baroda V. The Income tax Officer,Ward-1(1), Baroda

ITA 1345/AHD/2011

• Counselvise Citation: 134520514 RSA 2011
• Duration Of Justice: 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 06-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P M SHUKLA
• Keywords: Capital asset; Depreciation; Business expenditure; Initiation of penalty proceedings; Bad and doubtful debts
• Section: 143(3); 234B; 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI, A.K.GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.1345/AHD/2011 ASSESSMENT YEAR :2005-06 ASHOK JYOT OXYGEN PVT. LTD., AIMS HOUSE, OLD PADRA ROAD, BARODA PAN NO.AABCA5837H V/S . INCOME TAX OFFICER, WARD-1(1), BARODA (APPELLANT) .. (RESPONDENT) /BY APPELLANT SHRI P.M. SHUKLA, AR /BY RESPONDENT SHRI VINOD TANWANI, SR-DR /DATE OF HEARING 29-02-2012 /DATE OF PRONOUNCEMENT 16-03-2012 O R D E R PER KUL BHARAT, JUDICIAL MEMBER:- PRESENT APPEAL IS DIRECTED AGAINST THE ORDER DATED 25-02-2011 PASSED BY THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-I, BARODA FOR THE ASSESSMENT YEAR 2005- 06. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE-COMPANY IS MANUFACTURING AND TRADING IN INDUSTRIAL GASES. THE ASSESSEE-COMPANY FILED ITS RETURN OF INCOME ON 31-10-2005 DECLARING TOTAL INCOME OF RS.14,34,180/-. THE CASE WAS TAKEN UP FOR SCRUTINY AND THE ASSESSMENT U/S. 143(3) WAS FINALIZED ON 27-12-2007. THE ASSESSING OFFICER DETERMINED THE TOTAL INCOME AT RS.32,29,700/-. THE AO MADE DISALLOWANCE ON ACCOUNT OF PERSONAL USES OF THE MOTOR CAR, TELEPHON E EXPENSES AND ALSO DISALLOWED LOSS OF CYLINDERS AMOUNTING TO RS.17,34,907/-. THE ASSESSEE FEELING AGGRIEVED BY ITA NO.1345/AHD/2011 A.Y. 2005-06 ASHOK JYOT OXYGEN PVT. LTD. V. ITOWD-1(1) BRD PAGE 2 THE ASSESSMENT ORDER PREFERRED AN APPEAL BEFORE THE LD. CIT(A) CHALLENGING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 3. LD. CIT(A) DISMISSED THE GROUNDS OF APPEAL OF TH E ASSESSEE. THE ASSESSEE NOW FEELING AGGRIEVED BY THE ORDER OF LD. CIT(A) HA S FILED THE PRESENT APPEAL BEFORE THIS TRIBUNAL RAISING THE FOLLOWING GROUNDS:- 1.0 THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IN LAW AND ON FACTS HAS CONFIRMED THE ADDITIONS OF RS.23,9 10/- BEING ONE-TENTH OF TOTAL MOTOR CAR EXPENSES ON THE GROUND OF PERSON AL AND NON-BUSINESS USE. 2.0 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN LAW AND ON FACTS HAS CONFIRMED THE ADDITIONS OF RS.22,4 04/- BEING ONE-TENTH OF TOTAL TELEPHONE EXPENSES ON THE GROUND OF PERSON AL AND NON- BUSINESS USE. 3.0 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN LAW AND ON FACTS HAS CONFIRMED THE DISALLOWANCE OF RS.1 4,305/- BEING ONE- TENTH OF TOTAL OFFICE EXPENSES ON THE GROUND OF PER SONAL AND NON- BUSINESS EXPENDITURE. 4.0 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF LOSS ON CYLINDERS AMOUNTING TO RS.17,34,907/- WITHOUT APPRECIATING TH E FACT THE LOSS WHICH HAS BEEN WRITTEN OFF DURING THE YEAR WAS ALREADY SH OWN AS INCOME IN EARLIER YEARS. 5.0 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN LAW AND ON FACTS HAS DISMISSED THE GROUND RELATING TO T HE INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE I T ACT. 6.0 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE CHARGING OF INTE REST UNDER SECTION 234B & 234C OF THE INCOME TAX ACT, 1961. 4. DURING THE COURSE OF HEARING THE LD. AR OF THE A SSESSEE SUBMITTED THAT HE IS NOT PRESSING GROUND NO.1.0 TO 3.0. IN VIEW OF THE S UBMISSIONS MADE BY LD. AR WE DISMISS THE GROUNDS NO. 1.0, 2.0 AND 3.0 AS NOT PRE SSED. 5. NOW, GROUND NO.4 REMAINS TO BE EFFECTIVELY ADJUD ICATED. THE ASSESSEE HAS MADE WRITTEN SUBMISSION, THAT IS REPRODUCED AS UNDE R:- ITA NO.1345/AHD/2011 A.Y. 2005-06 ASHOK JYOT OXYGEN PVT. LTD. V. ITOWD-1(1) BRD PAGE 3 THE LEARNED ASSESSING OFFICER HAS MADE ADDITIONS OF RS.17,34,907/- BEING THE LOSS ACCOUNTED ON CYLINDER LOST. IN THIS CONTEXT, IT IS SUBMITTED THAT THE APPELLANT COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING IN INDUSTRIAL GASES SUCH AS OXYGEN, MEDICAL OXYGEN, NITROGEN, ARGON, DISSOLVED ACETYLEN E. ACCORDINGLY CYLINDERS ARE VERY VITAL TO THE BUSINESS OF THE COMPANY. IT I S VERY ROUTINE FEATURE OF THE BUSINESS THAT SOMETIMES CYLINDERS ARE NOT RECEIVED BACK FROM THE CUSTOMERS AND ARE LOST. DURING THE FINANCIAL YEAR RELEVANT TO THE A.Y. 1998-99 THE COMPANY HAD ISSUED VARIOUS DEBIT NOTES/MISCELLANEOU S SALES MEMO FOR THE CYLINDERS LOST BY THE CUSTOMERS AND DEALERS DURING THE COURSE OF THE BUSINESS CARRIED ON BY THE COMPANY WITH THEM. SUBSEQUENTLY O N RECEIPT OF THE CYLINDERS FOUND FROM THE CUSTOMERS/DEALERS, THE COM PANY REVERSED THE PART OF IT THROUGH THE ISSUE OF CREDIT NOTES TO THE PARTIES . IN THIS PROCESS THE BALANCE SUM OF RS.29,46,000/- REMAINED TOWARDS VARIOUS LOST CYLINDERS AT THE END WAS SHOWN AS INCOME IN THE BOOKS AS WELL AS THE RETURN OF INCOME FILED FOR A.Y. 1998-99. THE RELEVANT EXTRACTS FROM THE AUDITED ANN UAL ACCOUNTS OF THE FINANCIAL YEAR RELEVANT TO THE A.Y. 1998-99 ARE ENC LOSED SHOWING THE INCOME OF RS.29.46,000/- ON ACCOUNT OF CYLINDERS LOST. SUB SEQUENTLY, CERTAIN PARTIES EITHER RETURNED BACK THE CYLINDERS OR PAID THE AMOU NT CHARGED TO THEM FOR CYLINDERS LOST. THE BALANCE AMOUNT, AFTER CONSIDERI NG THE TIME GAP OF MORE THAN 5 YEARS WAS WRITTEN OFF. THE POSITION AS EXPLA INED BEFORE THE ASSESSING OFFICER IS AS UNDER: ASST. YEAR PARTICULARS AMOUNT REMARKS 1998-99 CYLINDER LOSS RECOVERY INCOME (RECEIVABLE) 29,46,000 - ISSUED BILLS TO THE CUSTOMERS/DEALERS TOWARDS CYLINDERS NOT RETURNED AND LOST BY THEM. THE SAID AMOUNTS ARE RECOVERABLE FROM THE CUSTOMERS/DEALERS AGAINST CYLINDERS NOT RETURNED BY THEM. - SHOWN AS INCOME IN THE A.Y. 1998-99 - (COPY OF AUDITED ACCOUNTS AND COMPUTATION OF INCOME SHOWING THE SAME AS INCOME ENCLOSED HEREWITH) 2001-02 TO 2003-04 ADJUSTMENTS IN CUSTOMERS / DEALERS ACCOUNTS: ON RETURNING OF CYLINDERS / MAKING PAYMENTS BY THEM. (12,11,093) * YEAR-WISE BREAK-UP IS AS PER NOTE BELOW THIS TABLE - ON CONSTANT FOLLOW UP BY THE COMPANY WITH CUSTOMERS / DEALERS FOR RETURNING CYLINDERS OR MAKING PAYMENTS OF CYLINDER LOSS RECOVERY BILLS, SOME OF THEM HAVE MADE THE PAYMENTS AND / OR RETURNED SOME OF THE CYLINDERS AND THEREFORE THE CUSTOMERS/ DEALERS ACCOUNTS HAVE BEEN ADJUSTED FOR THOSE PAYMENTS AND RETURN OF CYLINDERS ETC. ITA NO.1345/AHD/2011 A.Y. 2005-06 ASHOK JYOT OXYGEN PVT. LTD. V. ITOWD-1(1) BRD PAGE 4 2005-06 AMOUNT WRITTEN OFF BEING UNRECOVERABLE (RS.29,46,000 LESS RS.12,11,093) 17,34,907 -THOUGH COMPANY HAS MADE CONSTANTLY FOLLOWED UP WITH THE CUSTOMERS / DEALERS FOR THE RETURNING OF CYLINDERS OR MAKING PAYMENT OF OUTSTANDING AMOUNTS OF LOST CYLINDERS, BUT THE REMAINING CYLINDERS ARE NOT RETURNED BY THE CUSTOMERS / DEALERS AND NO AMOUNT HAS BEEN RECOVERED FROM THE CUSTOMERS / DEALERS AGAINST LOST CYLINDERS, THEREFORE AMOUNTS REMAINED OUTSTANDING FROM CUSTOMERS / DEALERS ARE BEING WRITTEN OFF AS CYLINDER LOST EXPENSES. YEAR-WISE BREAK-UP OF CYLINDERS RECOVERED & AMT. RE COVERED ASST. YEAR PARTICULARS AMOUNT (RS) 2001-02 CYLINDER FOUND & RETURNED BY PARTY 3,47,0 00 AMOUNT RECEIVED FROM PARTY 99,250 2002-03 CYLINDER FOUND & RETURNED BY PARTY 2,96,70 0 AMOUNT RECEIVED FROM PARTY 75,365 2003-04 CYLINDER FOUND & RETURNED BY PARTY 3,26,20 0 AMOUNT RECEIVED FROM PARTY 66,578 TOTAL CYLINDER FOUND & RETURNED BY PARTY 9,69,900 AMOUNT RECEIVED FROM PARTY 2,41,193 GRAND TOTAL 12,11,093 THE COPIES OF AUDITED ACCOUNTS SHOWING THE ABOVE AR E ENCLOSED HEREWITH FROM THE ABOVE, IT IS SUBMITTED THAT THE CYLINDERS LOSS OF RS.17,34,907/- BOOKED BY THE APPELLANT IS MORE OF A NATURE OF BAD DEBTS. THE AMOUNT BEING IRRECOVERABLE WAS WRITTEN OFF DURING THE YEAR UNDER CONSIDERATION WHICH WAS ALREADY SHOWN AS INCOME IN EARLIER YEARS. ACCORDINGLY THE CONDITION FOR ALLOWING BAD-DEBTS THAT THE DEBTS SHO WN ALREADY AS INCOME IN EARLIER YEARS SHOULD ACTUALLY BE WRITTEN OFF IN THE BOOKS IS ALSO SATISFIED BY THE APPELLANT. IN VIEW OF THE ABOVE, THE CYLINDERS LOST EXPENSES B EING BUSINESS LOSS TO THE COMPANY, THE CLAIM OF RS.17,34,907/- IN RESPECT THEREOF IS MADE WHICH SHOULD NOT BE DISALLOWED. THE APPELLANT, THEREFORE, PRAYS THAT THE DISALLOWANCE MADE ON THIS COUNT DESERVED TO BE DELE TED. FURTHER, THE LD. AR OF THE ASSESSEE SUBMITTED THAT IT IS NOT NECESSARY THAT EVERY YEAR THERE MUST BE AN INCOME. THE LD. AR PLACED RELIANCE ON THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. PRAYASHVIN B PATEL (2003) 132 TAXMAN ITA NO.1345/AHD/2011 A.Y. 2005-06 ASHOK JYOT OXYGEN PVT. LTD. V. ITOWD-1(1) BRD PAGE 5 677 (GUJ). ON THE CONTRARY LD. DR VEHEMENTLY ARGUED THAT THE ASSESSEE IS NOT ENGAGED IN THE BUSINESS OF SALE AND PURCHASE OF CYL INDERS. HE POINTED OUT THAT THE ASSESSEE HAS CLAIMED DEPRECIATION. HE FURTHER SUBMI TTED THAT THE ASSESSING OFFICER WAS CORRECT IN HOLDING THAT AS PER COMPANIES ACT, I F THERE IS A LOSS OF ASSET IT CAN BE SHOWN IN PROFIT AND LOSS ACCOUNT BUT FOR COMPUTATIO N OF TOTAL INCOME IT HAS TO TREATED UNDER THE PROVISIONS OF SECTION 32 OF THE ACT. LD. DR FURTHER ARGUED THAT SINCE THE ASSESSEE HAD CHARGED 100% DEPRECIATION THEREFORE, T HERE IS NO OPENING BALANCE OF WRITTEN DOWN VALUE. LD. DR CONTENDED THAT ONLY REAS ON AS GIVEN BY THE ASSESSEE IS THAT THE MANAGEMENT HAS DECIDED TO WRITE OFF. LD. D R SUBMITTED THAT THE DECISION OF THE MANAGEMENT CANNOT BE SOLE DETERMINING FACTOR FO R WRITING OFF. IT IS SUBMITTED THAT THE ASSESSEE FAILED TO SUPPLY DETAILS OF DEBTORS WI TH REGARD TO DEBIT NOTE / SALES MEMO RECORDED IN THE YEAR 1998-99 AND HOW THE LOSS HAS BEEN CRYSTALLIZED UNDER THE YEAR CONSIDERATION. LD. DR HEAVILY PLACED RELIA NCE UPON THE ORDER PASSED BY LD. CIT(A) AND THE ASSESSMENT ORDER. 6. THE LD. CIT(A) HAS DEALT THIS ISSUE IN PARA-5 OF HIS ORDER AND THE SAME IS REPRODUCED AS UNDER FOR THE SAKE OF CLARITY:- 5. THE FOURTH GROUND OF APPEAL IS AGAINST DISALLOW ANCE OF RS.17,34,907/- OF LOSS ON CYLINDERS. 5.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE CLAIM OF LOSS INCURRED UND ER THE HEAD CYLINDER LOSS EXPENSES SHOULD NOT BE DISALLOWED AS THE SAME WAS FOUND TO BE DEBITED BY CREDITING THE CYLINDER ACCOUNT APPEARING IN THE BLO CK OF ASSETS. THE AO STATES THAT AS PER SECTION 32, IT SHOULD HAVE BEEN DEALT W ITH WHILE CALCULATING DEPRECIATION ON THE BLOCK OF ASSETS BY REDUCING THE VALUE OF WDV BY THE SALE PROCEEDS. THE ASSESSEE SUBMITTED THAT THE CYLINDERS LOST EXPENSES REPRESENT THE VALUE OF CYLINDERS LOST IN THE COURSE OF THE BU SINESS CARRIED ON BY THE COMPANY, THE VALUE OF THE CYLINDERS HAS BEEN DEBITE D TO THE PROFIT AND LOSS ACCOUNT AS CYLINDERS LOST EXPENSES BY CORRECTLY ADJ USTING THE VALUE THEREOF IN COST OF DEPRECIATION BLOCK OF THE SAID ASSTS IN THE BOOKS. THE CONTENTION OF THE ASSESSEE WAS NOT FOUND TENABLE BY AO FROM THE DEPRE CIATION CHART AS CYLINDERS WERE SHOWN AS ASSET. 5.1.2 THE AO EXPRESSES THAT AS PER COMPANIES ACT, I F THERE IS A LOSS OF ASSETS IT CAN BE SHOWN IN P &L ACCOUNT BUT FOR COMP UTATION OF TOTAL INCOME IT HAS TO BE TREATED UNDER THE PROVISIONS OF SECTION 3 2. MOREOVER SINCE THE ASSESSEE HAD CHARGED 100% DEPRECIATION AUTHORITIES BELOW AND THERE IS NO OPENING BALANCE/WDV OF CYLINDERS THERE IS NO QUESTI ON OF REDUCING THE BLOCK BY THE LOSS ON CYLINDER AMOUNT. THEREFORE, THE SAME WAS DISALLOWED BY THE A.O. ITA NO.1345/AHD/2011 A.Y. 2005-06 ASHOK JYOT OXYGEN PVT. LTD. V. ITOWD-1(1) BRD PAGE 6 5.2 IN APPEAL, IT IS ARGUED THAT IN THE COURSE OF B USINESS INDUSTRIAL GASES ARE SUPPLIED IN CYLINDERS TO THE CUSTOMERS AND SOMETIME CYLINDERS ARE NOT RECEIVED BACK AND THAT THE COMPANY HAD ISSUED VARIO US DEBIT NOTES/MISC SALES MEMO DURING AY 98-99 AND SINCE IN THE RELEVA NT YEAR CERTAIN AMOUNTS WERE NOT RECEIVED AND THIS ASPECT WAS CONFIRMED BY THE MANAGEMENT, THE VALUE OF CYLINDERS LOST IS WRITTEN OFF IN THE BOOKS AND THEREFORE IT IS ARGUED THAT SUCH LOSS DOES NOT AMOUNT TO CLAIMING OF DEPRECIATI ON BUT IS A BUSINESS LOSS. 5.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE, THE SUBMISSIONS OF THE APPELLANT AND THE ASSESSMENT ORDER. IT IS AN ADMITT ED FACT THAT 100% DEPRECIATION WAS CLAIMED ON THESE CYLINDERS IN EARL IER YEARS. IT IS ARGUED BEFORE ME THAT DEBIT NOTE/MISC SALES MEMO WERE ISSU ED IN AY 98-99 IN RESPECT OF CERTAIN LOST CYLINDERS AND THAT RS.29460 00/- WAS SHOWN AS OTHER INCOME AND THAT THIS YEAR MANAGEMENT DECIDED TO WRI TE-OFF RS.17,34,907/- FOR LOST CYLINDERS WHICH IS A BUSINESS LOSS. FIRST OF A LL NO DETAILS OF DEBTORS HAVE BEEN SUBMITTED IN REGARD TO DEBIT NOTE/SALES MEMO R ECORDED IN AY 98-99 NEITHER DETAILS ARE AVAILABLE AS TO HOW THE LOSS HA S BEEN ESTABLISHED TO HAVE CRYSTALLIZED DURING THE YEAR. INCOME FROM SALE OF C YLINDERS APPARENTLY RECORDED BY WAY OF DEBIT NOTE IS NOT BUSINESS INCOM E AS THE APPELLANT IS TRADING IN GASES AND NOT IN CYLINDERS. MERE DECISIO N OF MANAGEMENT IN THIS REGARD IS NOT A DETERMINATIVE FACTOR. UNDER THE CIR CUMSTANCES THE CLAIM OF THE APPELLANT IS NOT ADMISSIBLE. GROUND NO.4 IS DISMISS ED. 6. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO TH E SUBMISSIONS MADE BY THE LD. AR AND THE DEPARTMENTAL REPRESENTATIVE, PERUSED THE RECORDS AND ORDERS OF THE AUTHORITIES BELOW. ADMITTEDLY, THERE IS NO DISPUTE THAT 100% DEPRECIATION AS PER INCOME TAX ACT WAS ALLOWED ON THE CYLINDERS. IT IS ALSO NOT DISPUTED THAT ASSESSEE IS NOT IN THE BUSINESS OF THE SALE AND PURCHASE OF CYL INDER. THE CONTENTION OF THE ASSESSEE IS THAT IT IS ENGAGED IN THE BUSINESS OF M ANUFACTURING AND TRADING INDUSTRIAL GAS BUSINESS I.E. OXYGEN, MEDICAL OXYGEN, NITROGEN, ARGON AND DISSOLVED ACETYLENE ETC. IT IS SUBMITTED THAT IT IS A ROUTINE FEATURE O F THE BUSINESS THAT SOMETIMES THE CYLINDERS ARE NOT RETURNED BY THE CUSTOMERS. AS PER THE AR FOR THE ASSESSEE, WHEREVER THE CYLINDERS ARE NOT RETURNED, A DEBIT NO TE IS RAISED AGAINST SUCH PARTY AND SAME IS DECLARED IN THE RETURN AS INCOME FROM SALE OF ASSET. IT IS NOTEWORTHY THAT THE LD. CIT(A) HAS OBSERVED THAT THE ASSESSEE FAILED TO GIVE RELEVANT DETAILS IN RESPECT OF DEBTORS SALE MEMO AND DEBIT NOTE, IT IS EVIDENT FROM THE RECORDS THAT THE ASSESSEE HAS NOT PRODUCED RELEVANT MATERIAL EVIDENCE IN SUPP ORT OF ITS CLAIM OF DEBTORS. THERE IS ANOTHER ASPECT OF THE MATTER IS THAT THE ASSESSE E HAS CLAIMED 100% DEPRECIATION ON THE CYLINDER AND TREATED CYLINDER IN ITS BLOCK O F ASSET. IN SUCH SITUATION, THE LOSS OF CYLINDERS CANNOT BE TREATED AS BAD DEBT. THE CONTEN TION OF THE ASSESSEE IS THAT IT HAS DECLARED THE INCOME FROM SALE OF CYLINDERS AS MISCE LLANEOUS INCOME IN EARLIER YEARS. ITA NO.1345/AHD/2011 A.Y. 2005-06 ASHOK JYOT OXYGEN PVT. LTD. V. ITOWD-1(1) BRD PAGE 7 WE DO NOT FIND ANY FORCE IN THE ARGUMENTS OF THE AS SESSEE HENCE NOT INCLINED TO ACCEPT THE SAME. THE ASSESSEE HAS NOT PLACED ANY SU PPORTING EVIDENCE IN SUPPORT OF ITS CLAIM QUA THE DEBTORS ON RECORD NEITHER BEFO RE LOWER AUTHORITIES NOR BEFORE US. IN THE ABSENCE OF THE SAME, THE CLAIM OF THE ASSESS EE IS RIGHTLY REJECTED BY THE LD. CIT(A). 7. WE ARE OF THE VIEW THAT THE CLAIM OF THE ASSESSE E IS NOT ALLOWABLE AS A BUSINESS LOSS OR SHORT TERM CAPITAL LOSS. THERE IS NO BUSINESS LOSS BECAUSE AFTER ALLOWING 100% DEPRECIATION THE VALUE OF ASSET HAS C OME DOWN TO NIL AND HENCE THERE CANNOT BE ANY BUSINESS LOSS. 7.1 SECOND, EVEN SHORT TERM CAPITAL LOSS IS NOT ALL OWABLE FOR TWO REASONS: FIRSTLY, THERE IS NO TRANSFER OF CAPITAL ASSET AND SECONDLY THAT SHORT TERM CAPITAL LOSS AS PER SECTION 50 OF THE I.T. ACT IS EXCESS OF WRITTEN DOW N VALUE OVER SALE PROCEEDS. WHEN WRITTEN DOWN VALUE IS NIL THERE CANNOT BE ANY SHORT TERM CAPITAL LOSS. BUT WHEN THERE IS THE SALE PROCEEDS, THERE WILL BE SHORT TERM CAPI TAL GAIN AS DECLARED BY THE ASSESSEE IN EARLIER YEARS. 8. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A), HENCE, THIS GROUND OF APPEAL IS DISMISSED B EING DEVOID OF ANY MERIT. 9. THE OTHER GROUNDS NO.5.0 AND 6.0 ARE CONSEQUENTI AL IN NATURE HENCE DISMISSED IN VIEW OF THE FINDING IN RESPECT OF GROU ND NO.4 10. IN THE RESULT, APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 16/03 /2012 SD/- SD/- (A.K.GARODIA) (KUL BHARAT) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) *DKP - 16/03/2012 ()* + ,- ,- ,- ,- ../ ../ ../ ../ 0/ 0/ 0/ 0/ / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT ITA NO.1345/AHD/2011 A.Y. 2005-06 ASHOK JYOT OXYGEN PVT. LTD. V. ITOWD-1(1) BRD PAGE 8 2. / RESPONDENT 3. *.2 , ,3 / CONCERNED CIT 4. , ,3- / CIT (A) 5. /67 ...2, , .2 , ()* / DR, ITAT, AHMEDABAD 6. 79: ;< / GUARD FILE. BY ORDER/ ,- , /TRUE COPY/ =/ ( > , .2 , ()* +