Madhya Gujarat Vij Co.Ltd., Baroda V. The Income tax Officer,Ward-4(1), Baroda

ITA 1709/AHD/2012

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 7719 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 02-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KARUN K ANT OJHA
• Keywords: Capital asset; Depreciation; Competent authority; Set aside
• Section: 28; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH (Conducted Through Virtual Court) Before: Ms. Annapurna Gupta, Accountant Member And Ms. Siddharta Nautiyal, Judicial Member Madhya Gujarat Vij Company Ltd., Sardar Patel Vidyut Bhavan, Race Course Circle, Baroda, PAN No: AADCM 7439H (Assessee) Vs The ITO, Ward-4(1), Baroda (Respondent) Assessee by : Shri M.K. Patel, Advocate Respondent by : Shri Karunkant Ojha, CIT/DR Date of hearing : 24-02-2022 Date of pronouncement : 28-02-2022 आदेश/ORDER PER : ANNAPURNA GUPTA, ACCOUNTANT MEMBER:- The present appeal has been filed by the Assessee against the order passed by the Commissioner of Income Tax (Appeals)-III, Baroda, (in short referred to as CIT(A)), dated 14-05-2012, u/s. 250(6) of the Income Tax Act, 1961(hereinafter referred to as the “Act”) pertaining to Assessment Year (A.Y) 2008-09. 2. Ground No. 1 reads as under: 1.0 The learned Commissioner of Income Tax (Appeals) erred in law and on facts has confirmed the reduction of the amount of Capital Grants & Subsidies and Consumers' Contribution aggregating to Rs. 2,63,84,78,000/- from the total cost of the Plant & Machinery for the purpose of allowing depreciation and has thereby confirmed the ITA No. 1709/Ahd/2012 Assessment Year 2008-09 I.T.A No. 1709/Ahd/2012 A.Y. 2008-09 Page No Madhya Gujarat Vij Co. Ltd. Vs. ITO 2 restriction of the assessee's claim of depreciation to Rs. 48,00,29,924/-as against Rs. 81,48,93,308/- claimed by the assessee. 3. Brief facts relating to the issue are that the Assessing Officer (A.O.) observed that in schedule 4 to the Balance Sheet as on 31.03.2008, the assessee company had reserves comprising the following deferred government grants, subsidies and contributions: Particulars RESERVES As on 31.03.2008 Rs. in lakh Government Grants Subsidies Susidies towards cost of capital assets 7637.86 Grant towards cost of Capital Assets 224.88 Consumer Contributions Consumer Contributions 2308.68 Consumer contributions towards capital assets 13573.85 Total 23745.27 Therefore, the A.O. asked the assessee to explain the nature of Government's Grants- Capital and why only 10% of this has been written back and shown as income of Rs. 2382.99 lakh under the head 'Other income' in the schedule -20 to the audited profit and loss account. The A.O. also asked the assessee to explain the nature of Consumers' contributions and why only 10% of this had been back as income of Rs. 256.52 lakh under the head 'Other income' in the schedule -20 to the audited profit and loss account. The assessee submitted before the A.O. that government disbursed the financial assistance in the form of government grants, for the infrastructural development in the field of electricity distribution, for certain under developed area and class of consumers. The benefit from the development of I.T.A No. 1709/Ahd/2012 A.Y. 2008-09 Page No Madhya Gujarat Vij Co. Ltd. Vs. ITO 3 the same accrued to the company over a longer period of time and hence, it had written back every year @10% of the year end balance, as per the accounting policy of the company. In respect of the consumers' contribution, the assessee submitted that the company has developed infrastructure of electrical line and cable network systems to provide the electricity at the consumers' doorstep and as per the rules framed by the Gujarat Electricity Regulatory Commission, the company recovered the amount towards the same from new consumers while releasing the connection to such customers. The benefit from the development of the same accrued to the company over a longer period of time and hence it had written back every year @10% of the year end balance. The A.O. accepted the contention of the assessee that capital grants from the Government and Consumers' contribution are capital in nature, but held that the treatment of 10% transferred to P & L account every year is not in accordance with the provisions of the I.T. Act, 1961. The A.O. held that the assessee company should have reduced the same from the capita! asset to arrive at the actual cost. Accordingly, the A.O. reduced the aggregate of capital subsidy, grant and consumers' contribution received of Rs. 26384.78 lakh from the cost of plant and machinery on a pro-rata basis. The A.O. also worked out the allowable depreciation at Rs. 48,00,29,924/- as against the depreciation ofRs. 81,48,93,308/- claimed by the assessee. 3.1 The Ld. CIT(A) upheld by the order of the A.O. following the order of the Ld. CIT(A) in the case of the assessee itself for assessment year 2006-07. 4. Before us, Ld. Counsel for the assessee pointed out that the appeal of the assessee for assessment year 2006-07 stood adjudicated by the ITAT in ITA No. 2583/Ahd/2010 vide order dated 09.11.2016 wherein the issue has been restored back to the A.O. to adjudicate afresh after verifying apportioned amount of granted relating to different assets. Our attention was drawn to the relevant findings of the ITAT at Para 17 of the order is as under: I.T.A No. 1709/Ahd/2012 A.Y. 2008-09 Page No Madhya Gujarat Vij Co. Ltd. Vs. ITO 4 17. We have heard the rival contentions and perused the material on record. Through this ground assessee has challenged the order of ld. CIT(A) sustaining the disallowance of depreciation at Rs.10,84,81,976/- by observing that capital subsidy and grant received are to be reduced from fixed asset and depreciation to be allowed on the remaining balance. We observe that the Government gives grant/subsidy to the holding company and then it is allocated to the assessee which is one of the subsidiary company and further such subsidy are not granted to actually to meet the cost but are granted as an inclusive of rural economically backward unviable areas. Assessee received subsidies on different schemes viz. Rural Electrification and Tribal area Electrification and the assets cannot be bifurcated into Rural/Tribal area etc. 17.1 There is no dispute to the fact that the grants received from the Government are capital in nature but they have not been given specifically for acquiring a particular asset. In such situation provision of section 43(1) Explanation 10 of the Act squarely applies for the treatment of such capital grant. Relevant provisions of section 43(1) of the Act read as under :- 43. In sections 28 to 41 and in this section, unless the context otherwise requires (1) "actual cost" means the actual cost of the assets to the assessee, reduced by that portion of the cost thereof, if any, as has been met96 directly or indirectly by any other person or authority: [Provided that where the actual cost of an asset, being a motor car which is acquired by the assessee after the 31st day of March, 1967, [but before the 1st day of March, 1975,] and is used otherwise than in a business of running it on hire for tourists, exceeds twenty- five thousand rupees, the excess of the actual cost over such amount shall be ignored, and the actual cost thereof shall be taken to be twenty-five thousand rupees.] [Explanation 10.--Where a portion of the cost of an asset acquired by the assessee has been met directly or indirectly by the Central Government or a State Government or any authority established under any law or by any other person, in the form of a subsidy or grant or reimbursement (by whatever name called), then, so much of the cost as is I.T.A No. 1709/Ahd/2012 A.Y. 2008-09 Page No Madhya Gujarat Vij Co. Ltd. Vs. ITO 5 relatable to such subsidy or grant or reimbursement shall not be included in the actual cost of the asset to the assessee : Provided that where such subsidy or grant or reimbursement is of such nature that it cannot be directly relatable to the asset acquired, so much of the amount which bears to the total subsidy or reimbursement or grant the same proportion as such asset bears to all the assets in respect of or with reference to which the subsidy or grant or reimbursement is so received, shall not be included in the actual cost of the asset to the assessee.] 17.2 Proviso to Explanation -10 to section 43(1) contemplates that subsidy or grant or reimbursement which cannot be relatable to the assets acquired then grant amount to be apportioned in the assets at the same proportion as such assets bears all the assets. We further observe that ld. Assessing Officer has given following finding for application of explanation -10 to section 43(1) by observing as follows:- 4.2 The contention of the assessee that Consumer's Contribution and Capital Grant are capital in nature is found tenable, but its treatment, of 10% thereof transferred to P & L account every year is not in accordance with the provisions of the Act. As envisaged in explanation 10 to section 43(1), where a portion of the cost an asset acquired by the assessee has been met directly or indirectly by the Central Government or State Govt. or any Authority established under any law, or by any other person, in the form of subsidy or grant or reimbursement then in a case where the subsidy is directly relatable to the asset, such subsidy shall not be included in the actual cost of the assets. In a case, where such subsidy or Grant or reimbursement, is of such nature that, it cannot be directly relatable to any particular assets, so much of the amount which bears to the total subsidy or reimbursement or Grant the same proportion as such asset bears to all the assets in respect of which or with reference to which such grant or subsidy or reimbursement is received shall no be included in the actual cost of that assets to the assessee. 4.3 In view of the clear provisions of the Act as stated supra and the assessee himself have admitted that the subsidy and grant received are towards Capital assets, the I.T.A No. 1709/Ahd/2012 A.Y. 2008-09 Page No Madhya Gujarat Vij Co. Ltd. Vs. ITO 6 assessee should have reduced the same from the Capital asset to arrive at the actual cost. However the assessee has failed to do so and also not furnished the details of fixed assets in respect of which the subsidy and grants have been received. Hence and inference is drawn that the Govt. grants/subsidy and consumers' contribution are relatable to fixed assets of plant & machinery. The assessee has claimed depreciation on Plant & Machinery as under: 17.3 We further observe that similar type of issue came up before the Tribunal in the case of GETCL(supra) which was adjudicated by the Co-ordinate Bench by observing as follows :- 20. We find that in the instant case, the CIT{A) held that excess depreciation claimed on account of capital grant comes to Rs.18.93 crores being 15% of Rs.176,62,04,718/-, i.e. Rs.26,49,30,708/- minus Rs.17,20,37,655/-, which amounts to Rs.9,28,93,053/-, and 15% of Rs.6427.94 lakhs amounting to Rs.964.191 lakh. The submissions of the assessee before us is that the uniform rate of 15% adopted by the CIT(A) is not justified. As per provisions of section 43(1} of the Act, the capital grant should be reduced from the cost/WDV of the relevant asset, and thereafter the depreciation is to be calculated. Thus, the capital grant receipt in respect of asset, on which depreciation is allowable at the rate different from 15% should be worked out as per the applicable rate. The DR could not point out any mistake in the above submission of the assessee. which we find is in accordance with law. We, therefore, set aside the orders of the lower authorities on this issue, and restore the matter back to the file of the AO for adjudication afresh after verifying the proportionate amount of grant relating to different asset, and applying the actual rate of depreciation which relate to these assets.Thus, this ground of appeal of the assessee is allowed for statistical purpose. 17.4 In the light of the decision of the Co-ordinate Bench discussed above and in the light of proviso to Explanation -10 to section 43(1) of the Act we find it justified to restore the issue back to the file of Assessing Officer to adjudicate afresh after verifying the apportioned amount of grant relating to different assets and calculate the depreciation at the rates applicable to such assets. Needless to mention that all necessary details will I.T.A No. 1709/Ahd/2012 A.Y. 2008-09 Page No Madhya Gujarat Vij Co. Ltd. Vs. ITO 7 be provided by the assessee to the Assessing Officer in order to calculate the correct amount of depreciation, Ld. Assessing Officer to provide proper opportunity of being heard should be given to the assessee. Accordingly, this ground of assessee is allowed for statistical purposes. 5. Ld. D.R. fairly agreed with the same. 5.2 In view of the above, since the Ld. CIT(A) has followed the order of the Ld. CIT(A) in the case of the assessee for assessment year 2006-07 while treating the entire capital subsidy grant and consumers contribution as capital in nature thus reducing the cost of capital asset and as a consequence the claim of depreciation thereon, and which issue has been restored back to the A.O. by the ITAT with the direction to determine the proportionate amount of grant relating to each asset, the said decision will apply to the present case also following which the issue in the present case also is restored back to the A.O. to be decided in accordance with the direction of the ITAT in assessment year 2006-07. 6. Ground no. 1 is allowed for statistical purposes. 7. Ground no. 2 reads as under: 2.0 The learned Commissioner of Income Tax (Appeals) has erred in law and facts in confirming the disallowance of Rs/ 1,26,000/- under the head small & low value items written off. 8. Brief facts relating to the issue are that the A.O. noted that the assessee had claimed Rs. 1,26,000/-towards small and low value items written off under the head 'Other Miscellaneous Expenses' in the profit and loss account. The A.O. further noted that in the notes pertaining to the significant accounting policies being followed by the assessee, it was mentioned that any depreciable assets, except office equipments and furniture and fixtures, having written down value below Rs. 5,000/- I.T.A No. 1709/Ahd/2012 A.Y. 2008-09 Page No Madhya Gujarat Vij Co. Ltd. Vs. ITO 8 have been fully charged to revenue in the year in which the assets are purchased. The A.O. held that this accounting policy adopted by the assessee was not in accordance with the provisions of the I.T. Act, 1961 and that the principles of accountancy cannot override taxation laws. Therefore, the A.O. disallowed Rs. 1,26,000/- claimed by the assessee towards small and low value items written off and added to the total income of the assessee. 9. The Ld. CIT(A) upheld by the disallowance made by the A.O. Before us ld. Counsel for the assessee pointed out that identical issue was dealt with by the ITAT in the case of the assessee in assessment year 2006-07 allowing the identical claim. Our attention was drawn to para 18 to 22 of the order is as under: 8. Ground no.3 -reads as under :- 3.0 The learned Commissioner of Income Tax (Appeals) has erred in law and facts in confirming the disallowance of Rs.1,08,030/- under the head small & low value items written off. 19. Addition of Rs.1,08,030/- was made by Assessing Officer towards the claim of assessee of write off of small and low value items of Rs.1,08,030/- as the actual cost of machinery and plant individually was not exceeding Rs.5,000/-. However, ld. Assessing Officer was of the view that w.e.f. 1.4.1996 no such provision exists for debiting the cost of assets as expenditure value of which is less than Rs.5,000/-. Even before first appellate authority, ld. CIT(A) dismissed the ground of assessee as no details were available on record bifurcating the assets as per block. 20. Now before the ld. Tribunal ld. AR the items booked under the head small & low value items include calculators, mobile phones etc. which considering the nature, cannot be capitalized as these items due to damage, theft, misplaced then it becomes difficult to adjust such loss as it is very difficult and cumbersome to find out the WDV of the lost item. 21. Ld. DR supported the orders of lower authorities. 22. We have heard the rival contentions and perused the material on record. Through this ground assessee is aggrieved that ld. CIT(A)'s decision for sustaining the addition of Rs.1,08,030/- being balance of small and low value items. As submitted by ld. AR that the amount of Rs.1,08,030/- mainly includes small and low value items including calculators, mobile phones etc. which is practically difficult for keeping control. Looking to the overall business exposures of the company and from the perspective of business and practical approach we are of the view that expenditure is relating to carrying on I.T.A No. 1709/Ahd/2012 A.Y. 2008-09 Page No Madhya Gujarat Vij Co. Ltd. Vs. ITO 9 and conducting of the business which has not been disputed by the Revenue, therefore, the assessee needs to be allowed the claim of expenditure of Rs.1,08,030/- being value of small and low value items. This ground of assessee is allowed. 10. Ld. D.R. fairly agreed with the same. 10.1 In view of the same since identical issue stands adjudicated in favour of the assessee in assessment year 2006-07, the issue stands covered by the said order of the ITAT. Accordingly, the claim of the assessee to small and low value item written off amounting to Rs. 1,26,000/- is allowed. 10.3 Ground no. 2 is allowed. 11. Ground no. 3 reads as under: 3.0 The learned Commissioner of Income Tax (Appeals) erred in law and on facts has confirmed the disallowance of Miscellaneous losses and write offs amounting to Rs. 47,88,340/-. 12. Brief facts relating to the issue are that the A.O. noted that the assessee had claimed losses on account of loss of materials through pilferage, shortage of material in transit, shortage arising on physical verification, obsolescence of materials / stores, loss in sale of scrap etc., aggregating to Rs 47,88,340/- under the head 'Miscellaneous losses and write-offs'. Since the assessee failed to furnish any documentary evidence in respect of these claims, the A.O. disallowed the claim of Rs. 47,88,340/- and added to the total income of the assessee. The Ld. CIT(A) upheld the order of the A.O. 13. Before us, Ld. Counsel for the assesse pointed out that it had been submitted to the Ld. CIT(A) that the impugned losses and write off were on account of loss material through pilferage. shortage of material in transit, shortage arising on physical verification, obsolescence of materials, stores, loss in sale of scrap etc.. Our attention I.T.A No. 1709/Ahd/2012 A.Y. 2008-09 Page No Madhya Gujarat Vij Co. Ltd. Vs. ITO 10 was drawn to the submission made in this regard before the Ld. CIT(A) placed before us at paper book at page no. 5 is as under: 1.1 In this context, it is submitted that during the year the company has claimed Rs/47,88,340/- on account of miscellaneous losses and write offs. It is submitted that these losses are on account of loss of materials through pilferage, shortage of material in transit, shortage arising on physical verification, obsolescence of materials/ stores, loss in sale of scrap etc. It is, therefore, submitted that the losses have been incurred in the-day to day business activities and is purely of revenue nature. 1.2 It is submitted that the company carried out physical verification of material by a' specified team as per the standard practices. After completion of physical verification, shortage/excesses of materials were listed out. The detailed reasons of shortage of material were received from respective stores in-charge. Excess material was treated as gain of the materials. However, 'shortage of material was treated as loss of material after detailed analysis and approved by the Competent Authority. Looking to the no. of transactions and values percentage of shortages is very low. The main reasons for shortages are as under: - Weight difference - Difference is occurred due to change of mode of measurement i.e., material received' in MT while issued as per no. of bags as well as in piecemeal etc. - Due to physical properties of material. - Transaction of breakable items damaged during handling. - Inter-changing of quantitative value at the time of issue due to same shape, size, etc. 1.3 Accordingly such losses on account of shortage, pilferage of stock is written off after approval of the competent authority. The assessee, therefore, prays that the additions made on this count may be deleted. 1.4 The assessee also invites your honour's kind attention to the fact that the similar issue has been decided by the Hon'ble Commissioner (Appeals) in the favour of assessee in case of Gujarat Energy Transmission Corp. Ltd. (GETCO). a sister concern of the assessee, for the Asst. Year 2006-07 and 2007-08. The copy of the CIT(A)'s order passed in case of GETCO for the Asst. Year 2007-08. (Refer Annexure-l). 14. He further pointed out that location-wise details of write off was also filed. Our attention was drawn to page 7 of the paper book containing the details as under: Code Account Head flame of Location Amount Rs. in Lakhs 79510 SHORTAGES ON PHYSICAL VER.OF MAT STOCKS GODHRA O&M DIV 7.98 79510 SHORTAGES ON PHYSICAL VER.OF MAT STOCKS HALOL O&M DIV 0.02 79511 LOSS OF MATERIALS BY PILFERAGE ETC. GODHRA O&M DIV 9.59 I.T.A No. 1709/Ahd/2012 A.Y. 2008-09 Page No Madhya Gujarat Vij Co. Ltd. Vs. ITO 11 79511 LOSS OF MATERIALS BY PILFERAGE ETC.. HALOL O&M DIV 25.76 79511 LOSS OF MATERIALS BY PILFERAGE ETC. LUNAWADA O&M DIV 0.99 79520 LOSS OF CASH WRITTEN OFF DAHODO&MDIV 0.65 79530 COMPENSATION FR INJURIES, DEATHS-STAFF DABHOI O&M DIV 0.49 79530 COMPENSATION FR INJURIES,DEATHS-STAFF ANAND O&M DIV 2.21 79530 COMPENSATION FR INJURIES,DEATHS-STAFF GODHRA O&M DIV 0.18 TOTAL 47.88 15. Ld. Counsel for the assessee further pointed out that in the case of the sister concern of the assessee i.e. Gujarat Energy Transmission Corporation Ltd,the Ld. CIT(A) had allowed identical losses claimed for assessment year 2006-07 and 2007-08 which was upheld by the ITAT in ITA No. 704/Ahd/2012 for A.Y. 2008-09 dated 12.06.2015. Our attention was drawn to the relevant findings of the ITAT of the paper book page no. 62 as under: 38. Brief facts of the case are that the AO observed that the assessee has claimed Rs.1,41,15,000/- on account of miscellaneous loss and write offs. In reply to the show cause notice, the assessee submitted that these losses are on account of loss of materials, through pilferage, shortage of material-in-transit, shortage arising on physical verification, obsolescence of materials/stores, loss in sale of scrap etc. It was submitted that the losses have been incurred in the day-to-day business activities and is purely of revenue nature. The AO observed that from the submission of the assessee, it was clear that the assessee's claim was not substantiated with any documentary evidence. Accordingly, he disallowed deduction of Rs.1,41,15,000/-. 39. On appeal, the CIT(A) deleted the addition and held that similar issue was decided by the CIT(A) in favour of the assessee in assessee's own case for the Asst.Year 2006-07 and 2007-08. Following the same, he deleted the disallowance of Rs.1,41,15,000/-. 40. The DR relied on the order of the AO. He could not bring any material on record to how that the relief allowed by the CIT(A) in the Asstt.Year 2006-07 and 2007-08 was appealed against before higher forums, and the order of the CIT(A) was varied by any higher authority. In the absence of any such material, we do not find any good reason to interfere with the order of the CIT(A) on this issue, which is hereby confirmed and the ground of appeal of the Revenue is dismissed. I.T.A No. 1709/Ahd/2012 A.Y. 2008-09 Page No Madhya Gujarat Vij Co. Ltd. Vs. ITO 12 16. In Assessment Year 2009-10 also in ITA No. 633/Ahd/2013 order dated 05.09.2019 our attention was drawn to the relevant findings at page 69 as under: 4. Ground No.2 The revenue has also challenged the deletion of disallowance of loss of material through pilferage, shortage etc. to the tune of Rs.2,36,35,000/-. 5. At the very onset of the proceeding, the Learned AR relied upon the judgment passed by the Co-ordinate Bench in ITA No.761/Ahd/2012 in assessee’s own case for A.Y. 2008-09 whereby and whereunder the identical issue has been decided in favour of the assessee. A copy whereof has also been submitted before us. The Learned DR, however, failed to raise any serious objection to such contentions made by the Learned AR. 6. Heard the respective parties, perused the relevant materials available on record and also the judgment passed by the Co-ordinate Bench in ITA No.761/Ahd/2012 for A.Y. 2008-09. The relevant portion of dealing with the identical issue is as follows: “37. The ground no.2 of the Revenue is directed against the order of the CIT(A) in deleting the addition of Rs.1,41,15,000/- made on account of disallowance of loss of material through pilferage, shortage of material-in- transit, shortage arising on physical verification etc. 38. Brief facts of the case are that the AO observed that the assessee has claimed Rs.1,41,15,000/- on account of miscellaneous loss and write offs. In reply to the show cause notice, the assessee submitted that these losses are on account of loss of materials, through pilferage, shortage of material-in-transit, shortage arising on physical verification, obsolescence of materials/stores, loss in sale of scrap etc. It was submitted that the losses have been incurred in the day-to-day business activities and is purely of revenue nature. The AO observed that from the submission of the assessee, it was clear that the assessee’s claim was not substantiated with any documentary evidence. Accordingly, he disallowed deduction of Rs.1,41,15,000/-. 39. On appeal, the CIT(A) deleted the addition and held that similar issue was decided by the CIT(A) in favour of the assessee in assessee’s own case for the Asst.Year 2006-07 and 2007-08. Following the same, he deleted the disallowance of Rs.1,41,15,000/-. 40. The DR relied on the order of the AO. He could not bring any material on record to how that the relief allowed by the CIT(A) in the Asstt.Year 2006-07 and 2007-08 was appealed against before higher forums, and the order of the CIT(A) was varied by any higher authority. In the absence of any such material, we do not find any good reason to interfere with the order of the CIT(A) on this issue, which is hereby confirmed and the ground of appeal of the Revenue is dismissed.” We find that the Co-ordinate Bench has decided the issue in favour of the assessee. In the absence of any changed circumstances, we find no reason to interfere in the order I.T.A No. 1709/Ahd/2012 A.Y. 2008-09 Page No Madhya Gujarat Vij Co. Ltd. Vs. ITO 13 passed by the Learned CIT(A) and hence case of the Revenue is found to be devoid of any merit and thus dismissed. 17. Ld. D.R. fairly agreed with the same. 18. In view of the above since identical disallowance has been deleted by the ITAT in the case of sister concern of the assessee, the decision in the said case would squarely apply in the present case also following which the impugned disallowances of write offs amounting to Rs.1,26,000/-is deleted. 19. Ground no. 4 is accordingly allowed. 20. In effect appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 28 -02-2022 Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (ANNAPURNA GUPTA) JUDICIAL MEMBER True Copy ACCOUNTANT MEMBER Ahmedabad : Dated 28/02/2022 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद