ACIT circle 7 (1), v. Sainik Mining & Allied Services Ltd,

ITA 3008/DEL/2007 | 2004-2005
Pronouncement Date: 29-01-2010 | Result: Dismissed

Appeal Details

RSA Number 300820114 RSA 2007
Assessee PAN AAACS2791P
Bench Delhi
Appeal Number ITA 3008/DEL/2007
Duration Of Justice 2 year(s) 7 month(s) 11 day(s)
Appellant ACIT circle 7 (1),
Respondent Sainik Mining & Allied Services Ltd,
Appeal Type Income Tax Appeal
Pronouncement Date 29-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 29-01-2010
Date Of Final Hearing 02-12-2009
Next Hearing Date 02-12-2009
Assessment Year 2004-2005
Appeal Filed On 18-06-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH G DELHI ] BEFORE SHRI D. R. SINGH JM SHRI K. D. RAN JAN AM I. T. APPEAL NO. 3008 (DEL) OF 2007. ASSESSMENT YEAR : 2004-05 ASSTT. COMMISSIONER OF INCOME-TAX M/S. SAINIK MINING AND ALLIED CIRCLE : 7 (1) VS. SERVICES LIMITED N E W D E L H I. 129 TRAN SPORT CENTRE PUNJABI BAGH ROHTAK ROAD NEW DELHI-110 035. P A N / G I R NO. AAA CS 2791 P. ( APPELLANT ) ( RESPONDE NT ) ASSESSEE BY : SHRI SALIL KAPOOR ADV.; & SHRI RAMAN CHAWLA C. A.; DEPARTMENT BY : SHRI STEPHEN GEORGE [CIT] - D. R.; O R D E R. PER K. D. RANJAN AM : THIS APPEAL BY THE REVENUE FOR ASSESSMENT YEAR 200 4-05 ARISES OUT OF THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-X NEW DEL HI. 2. THE FIRST ISSUE FOR CONSIDERATION RELATES TO ALL OWANCE OF DEPRECIATION AT THE RATE OF 40 PER CENT AS AGAINST 25 PER CENT ON DUMPERS TRUCKS / TIPPERS TATA 407 TATA 709 TATA TANKERS AND OTHER SIMILAR VEHICLES. THE FACTS OF T HE CASE STATED IN BRIEF ARE THAT THE ASSESSEE COMPANY DURING THE ASSESSMENT YEAR UNDER CONSIDERAT ION WAS ENGAGED IN THE BUSINESS OF I. T. APPEAL NO. 3008 (DEL) OF 2007. 2 MINING LOADING AND TRANSPORTATION SALE OF AUTOMOB ILE PARTS DIESEL LUBRICANTS AND ALLIED PRODUCTS. THE ASSESSEE HAD CLAIMED A SUM OF RS.8 1 5 76 721/- AS DEPRECIATION ON PAY- LOADERS TRIPPERS AND TRUCKS AT THE RATE OF 40 PER CENT. THE AO RELYING ON DECISION FOR ASSESSMENT YEAR 2003-04 TREATED THE PAY-LOADERS TR IPPERS AND TRUCKS IN THE NATURE OF MACHINERY AND NOT AS VEHICLES. ACCORDINGLY DEPREC IATION WAS ALLOWED AT THE RATE OF 25 PER CENT AS AGAINST CLAIMED BY THE ASSESSEE AT THE RATE OF 40 PER CENT. 3. BEFORE THE LD. CIT (APPEALS) IT WAS SUBMITTED TH AT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF LOADING AND TRANSPORTATION OF COAL IN M INES OWNED BY VARIOUS COAL SUBSIDIARIES OF COAL INDIA LTD. THE TRANSPORTATION WORK WAS DONE W ITH THE HELP OF TIPPERS [TRUCKS FITTED WITH HYDRAULIC SYSTEM] AND LOADING WORK WAS DONE WITH TH E HELP OF PAY LOADERS. THE ASSESSEE COMPANY WAS RAISING BILLS ON VARIOUS COAL SUBSIDIAR IES OF COAL INDIA LTD. FOR TRANSPORTATION AND LOADING OF COAL ON PER TONNE PER KILOMETRE BASI S. AS THE ASSESSEE COMPANY WAS USING ITS VEHICLES FOR RUNNING THEM ON HIRE FOR TRANSPORTATIO N OF COAL THE ASSESSEE HAD CLAIMED HIGHER RATE OF DEPRECIATION. IT WAS FURTHER SUBMITTED THA T THE ASSESSEE HAD RECEIVED THREE TYPES OF RECEIPTS I.E. TRANSPORTATION RECEIPTS LOADING RECE IPTS AND SURFACE MINING RECEIPTS. IT WAS POINTED OUT THAT THE ASSESSEE HAD OUTSOURCED ENTIRE LY ITS SURFACE MINING ACTIVITIES THROUGH OTHER CONTRACTORS WHEREAS LOADING AND TRANSPORTATIO N WORK WAS DONE PARTLY BY THE ASSESSEE THROUGH ITS OWN TRUCKS AND TIPPERS ETC. AND PARTLY BY TRUCKS AND TIPPERS OF OTHER CONTRACTORS WHO HAD ATTACHED THEIR VEHICLES WITH THE ASSESSEE C OMPANY. IT WAS ALSO SUBMITTED THAT DURING THE LAST YEAR THE ASSESSEE COMPANY GOT CONTRACT FRO M RAJASTHAN STATE MINES AND MINERALS FOR 'HIRING OF HEAVY EARTH MOVING EQUIPMENT FOR REMOVAL OF OVERBURDEN AND RAISING OF SALEABLE OF LIGNITE FROM KASNAU MINES LOCATED AT NAGAUR DIST T. RAJASTHAN'. IN THIS CONTRACT THE ASSESSEE COMPANY HAD TO PROVIDE CERTAIN HEAVY EARTH MOVING EQUIPMENT FOR REMOVAL OF OVERBURDEN ON HIRE BASIS. FURTHER IT WAS ALSO SUBM ITTED THAT THE AO HAS ACCEPTED THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF TRANSPORTAT ION AND LOADING OF COAL. THEREFORE THE QUESTION WAS TO BE DECIDED WHETHER THE ASSETS USED WERE ONLY MACHINERIES AND NOT VEHICLES ON THE BASIS OF WHICH THE ASSESSEE WAS ENTITLED FOR DEPRECIATION AT THE RATE OF 40 PER CENT. IT WAS ALSO CONTENDED THAT IT WAS NOT POSSIBLE TO COND UCT TRANSPORTATION AND LOADING THROUGH THE FIXED ASSETS BEARING THE CHARACTERISTIC OF ONLY MAC HINERY AND THAT VERY VEHICLE WOULD BEAR SOME CHARACTERISTIC OF MACHINERY INCLUDING MOTOR TA XIS LORRIES TRUCKS ETC. ALL THESE VEHICLES I. T. APPEAL NO. 3008 (DEL) OF 2007. 3 ARE COMBINATION OF MACHINERIES WHICH ARE PUT TOGETH ER AS PER SPECIFICATION SUITED TO THE RELEVANT REQUIREMENT OF THE CLIENT. 4. IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAD PURCHASED CERTAIN HEAVY EARTHMOVING MACHINERY FOR REMOVAL OF OVERBURDEN. THE EARTH MOV ING MEANS SHIFTING / TRANSFER OF TOP SOIL I.E. GOOD EARTH AND OVERBURDEN FROM ONE PLACE TO AN OTHER PLACE WITH THE HELP OF BULLDOZERS EXCAVATORS AND MOTOR GRADERS. THE TOP SOIL AND O VERBURDEN IS THEN TRANSPORTED TO TOP SOIL STAG AND OB DUMPS WITH THE HELP OF DUMPERS. IT WA S ALSO SUBMITTED THAT EXPRESSION 'TRANSPORTATION' MEANS 'THE MOVEMENT OF GOODS OR PE RSONS FROM ONE PLACE TO ANOTHER BY CARRIER'. CARRIER ACCORDING TO DICTIONARY MEANING IS 'INDIVIDUAL OR ORGANIZATION' ENGAGED IN TRANSPORTING OF PASSENGERS OR GOODS FOR HIRE'. THE LD. AR OF THE ASSESSEE PLACED RELIANCE ON DECISION OF HON'BLE GAUHATI HIGH COURT IN THE CASE OF ABC INDIA LTD. 226 ITR 914 (GAUHATI). IT WAS ALSO SUBMITTED THAT IT IS NOT T HE ONE VEHICLE WHICH PERFORMS LOADING AND TRANSPORTATION ACTIVITY BUT THE PROCESS PERFORMED BY HYDRAULIC EXCAVATORS AND BULLDOZERS IS SUBSERVIENT TO THE TRANSPORTATION ACTIVITY PERFORME D BY REAL DUMPERS/TRUCKS. IN ORDER TO ARRIVE AT A JUSTIFIABLE CONCLUSION IT WAS NECESSARY TO LOO K AT THE PROCESS AS A WHOLE AND NATURE OF WORK PERFORMED BY SET OF VEHICLES RATHER THAN TO GO BY THE NAME OF EACH VEHICLE OR THE SPARE PARTS THROUGH WHICH IT IS MADE OR EQUIPMENTS GENERA LLY MANUFACTURED BY THE COMPANY FROM WHERE THESE VEHICLES HAVE BEEN PURCHASED. IT WAS F URTHER SUBMITTED THAT IN ORDER TO DETERMINE WHICH ASSET BELONGS TO SAME CLASS WE HAVE TO LOOK I NTO THE PURPOSE FOR WHICH A PARTICULAR ASSET WAS PURCHASED AND NOT THE PURPOSE WHICH WAS GENERALLY SERVED BY THE ASSET. THE ASSESSEE PLACED RELIANCE ON SEVERAL DECISIONS IN SU PPORT OF ITS CONTENTION THAT THE DUMPERS TRUCKS TIPPERS EXCAVATORS BULLDOZERS GRADERS PAY -LOADERS ETC. WERE VEHICLES AND SINCE THESE VEHICLES WERE USED FOR TRANSPORTATION FOR HIRE THE ASSESSEE WAS ENTITLED FOR DEPRECIATION AT THE RATE OF 40 PER CENT. 5. THE LD. CIT (APPEALS) RELYING ON THE DECISION OF HIS PREDECESSOR HELD THAT VEHICLES USED BY THE ASSESSEE IN THE BUSINESS OF TRANSPORTAT ION WERE ELIGIBLE FOR DEPRECIATION AT THE RATE OF 40 PER CENT. HE WAS OF THE OPINION THAT THE ASS ETS WERE PRIMARILY VEHICLES FITTED WITH HYDRAULIC SYSTEMS. MOST OF THEM WERE REGISTERED AS HEAVY VEHICLES UNDER MOTOR VEHICLE ACT. ON EXAMINATION OF NATURE OF ASSETS FURNISHED BY THE ASSESSEE HE WAS OF THE OPINION THAT SOME I. T. APPEAL NO. 3008 (DEL) OF 2007. 4 OF THE VEHICLES WERE NOT VEHICLE PER SE SUCH AS EXC AVATORS BULLDOZERS GRADERS AND PAY- LOADERS. THESE WERE THE MACHINES USED FOR THE PURP OSE OF EARTH MOVING AND NOT FOR THE PURPOSE OF TRANSPORTATION OF GOODS MERCHANDIZE OR PERSONS FROM ONE PLACE TO ANOTHER. THE LD. CIT (APPEALS) THEREFORE WAS OF THE VIEW THAT HYDRAULIC BULLDOZERS MOTOR GRADERS HM/CATERPILLARS PAY-LOADERS WERE NOT MOTOR VEHICLES MOTOR LORRIES OR MOTOR TAXIES AND THEREFORE EVEN IF THEY WERE USED IN THE BUSINESS O F RUNNING ON HIRE THE ASSESSEE WAS NOT ENTITLED FOR HIGHER RATE OF DEPRECIATION. HOWEVER HE WAS OF THE OPINION THAT DUMPERS TRUCKS TIPPERS TATA 407 TATA 709 TATA TANKER AN D OTHER SIMILAR VEHICLES WERE IN THE NATURE OF MOTOR LORRIES AND WERE ELIGIBLE FOR HIGHE R RATE OF DEPRECIATION. AND ACCORDINGLY HE DIRECTED THE ASSESSING OFFICER TO ALLOW DEPRECIATI ON @ 40% ON SUCH ASSETS. 6. BEFORE US THE LD. AR OF THE ASSESSEE SUBMITTED T HAT THE ASSETS ON WHICH THE LD. CIT (A) HAS ALLOWED DEPRECIATION AT THE RATE OF 40 PER CENT ARE ROAD VEHICLES ON WHICH HIGHER RATE OF DEPRECIATION IS ALLOWABLE. THESE VEHICLES HAD BEEN USED FOR TRANSPORTING COAL FROM COAL MINES OWNED BY SUBSIDIARY COMPANIES OF COAL INDIA LTD FRO M ONE PLACE TO ANOTHER. THE PAYMENT HAS BEEN RECEIVED ON PER TONNE PER KILOMETRE BASIS. THEREFORE THE ASSESSEE HAS USED THE EARTH MOVING VEHICLES ON HIRE AND IS ENTITLED TO HIGHER R ATE OF DEPRECIATION ON SUCH ASSETS. HE FURTHER SUBMITTED THAT HON'BLE GUJARAT HIGH COURT I N THE CASE OF SHIV CONSTRUCTION 165 ITR 160 (GUJ.) HAS HELD THAT THE DUMPERS ARE ROAD TRANS PORT VEHICLES. IN THE CASE OF GUJCO CARRIERS 256 ITR 50 HON'BLE GUJARAT HIGH COURT HAS HELD THAT CRANES FITTED WITH TRANSPORT VEHICLES MOBILE CRANE FITTED ON MOTOR LORRIES ARE ENTITLED FOR HIGHER RATE OF DEPRECIATION. HE ALSO PLACED RELIANCE ON THE DECISION OF HON'BLE BOM BAY HIGH COURT IN THE CASE OF CIT VS. S.C. THAKUR & BROS 18 DTR 271 (BOM). ON THE OTHER HAND THE LD. SR. DR SUBMITTED THAT THE VEHICLES HAVE BEEN USED BY THE ASSESSEE IN HIS OWN BUSINESS. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRANSPORTATION AND THEREFORE THE ASSE TS CANNOT BE TREATED AS VEHICLES GIVEN ON HIRE BUT HAVE BEEN USED AS PLANT AND MACHINERY. I N REJOINDER THE LD. AR OF THE ASSESSEE RELYING ON THE DECISION IN THE CASE OF ABC INDIA LT D. VS. CIT (SUPRA) SUBMITTED THAT HON'BLE GAUHATI HIGH COURT HAS HELD THAT WHERE THE ASSESSEE WAS ENGAGED IN THE TRANSPORTATION OF GOODS BY ROAD FROM ONE PLACE TO ANOTHER USING ITS O WN TRUCKS FOR SUCH TRANSPORTATION IT HAS BEEN HELD THAT THE ASSESSEE USED THE LORRIES FOR RU NNING THEM ON HIRE AND HENCE WAS ENTITLED FOR DEPRECIATION AT THE RATE OF 40 PER CENT. I. T. APPEAL NO. 3008 (DEL) OF 2007. 5 7. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE THAT LD CIT(A) HAS ALLOWED DEPR ECIATION @ 40% ON ASSETS USED BY ASSESSEE FOR TRANSPORTING COAL FROM ONE PLACE TO AN OTHER PLACE. THERE IS NO DISPUTE THAT THE ASSESSEE IS CHARGING MONEY ON PER TONNE PER KILOMET RE BASIS FOR TRANSPORTATION PURPOSES. THUS THE ASSETS HAVE BEEN USED IN BY THE ASSESSEE IN OWN BUSINESS OF HIRING. HONBLE GUJARAT HIGH COURT IN THE CASE OF GUJCO CARRIERS V. CIT [2002] 122 TAXMAN 206/256 ITR 50 (GUJ.) HAS HELD THAT A MOBILE CRANE MOUNTED ON A TRUCK CONSTIT UTES A SINGLE UNIT KNOWN AS A TRUCK CRANE WHICH IS ADAPTED FOR USE UPON ROADS FOR SPECIAL SER VICES. IT WILL FALL UNDER THE CATEGORY OF MOTOR TRUCK (ALSO MOTOR LORRY) FOR PURPOSES OF A LLOWING DEPRECIATION. SIMILARLY DUMPERS ARE ROAD TRANSPORT VEHICLES AS HELD BY HONBLE GUJ ARAT HIGH COURT IN THE CASE OF SHIV CONSTRUCTION CO. V. CIT [1987] 165 ITR 160 (GUJ.). FROM THE ORDER OF THE LD. CIT (APPEALS) WE FIND THAT THE LD. CIT (APPEALS) RELYING ON VARIO US DECISIONS HAS COME TO THE CONCLUSION THAT DUMPERS TRUCKS TIPPERS TATA 407 TATA 709 TATA TANKERS AND OTHER SIMILAR VEHICLES WERE USED IN TRANSPORTATION OF GOODS FROM ONE PLACE TO ANOTHER AND THEREFORE THEY WERE FALLING IN THE CATEGORY OF MOTOR VERSUS MOTOR LORRIES OR OTHER MOTOR TAXIES AND WERE ENTITLED FOR DEPRECIATION AT THE RATE OF 40 PER CEN T AS PER ENTRY III (3)(II) OF PART A OF APPENDIX 1 OF I. T. RULES 1962. THE LD. CIT (APPEALS) HAS DISCUSSED THE ISSUE THREADBARE BY TAKING THE HELP OF PICTURES AND ANALYZING THE ISSUE THREADBARE . HONBLE MADHYA PRADESH HIGH COURT IN CIT V. SHARMA MOTOR SERVICE [1998] 148 CTR (MP) 75 HAS HELD THAT AN OWNER WHO HOLDS A TRANSPORT FLEET OF BUSES ON PERMITS FOR HIRING THEM CAN BE SAID TO BE DOING A TRANSPORT BUSINESS AND WILL BE ENTITLED TO DEPRECIATION. LIKEWISE IF THE OWNER USES MOTOR LORRIES FOR GOODS CARRIAGE AS A REGULAR BUSINESS THEN ALSO HE IS ENT ITLED TO DEPRECIATION. SIMILARLY IF THE OWNER IS DOING THE BUSINESS OF GIVING HIS MOTOR CARS ON H IRE AS TAXIS THEN ALSO HE WILL BE ENTITLED TO DEPRECIATION. IN ALL THESE CASES DEPRECIATION WOUL D BE ADMISSIBLE AT THE HIGHER RATE OF 50 PER CENT. IN VIEW OF DECISION OF HONBLE MADHYA PRADES H HIGH COURT IN CIT V. SHARMA MOTOR SERVICE (SUPRA) THE ASSESSEE WILL BE ENTITLED TO HI GHER RATE OF DEPRECIATION. ACCORDINGLY IN OUR CONSIDERED OPINION THE LD. CIT (A) WAS JUSTIFIE D IN ALLOWING THE RELIEF TO THE ASSESSEE IN RESPECT OF THESE VEHICLES. HENCE NO INTERFERENCE IS CALLED FOR. 8. THE SECOND ISSUE FOR CONSIDERATION RELATES TO DE LETING THE ADDITION ON ACCOUNT OF BAD DEBTS AMOUNTING TO RS.3 08 890/-. THE ASSESSING OF FICER FROM THE PROFIT AND LOSS ACCOUNT NOTED THAT THE ASSESSEE HAD NOT FULFILLED THE CONDI TIONS UNDER SECTION 36(1)(VII) READ WITH SECTION 36(2) IN RESPECT OF VARIOUS AMOUNTS CLAIMED AS BAD DEBT IN RESPECT OF VARIOUS I. T. APPEAL NO. 3008 (DEL) OF 2007. 6 PERSONS. IT WAS NOTED BY THE ASSESSING OFFICER THA T THE AMOUNTS GIVEN WERE ADVANCES FOR TRANSPORTATION WORK FROM TIME TO TIME. EITHER THE WORK WAS NOT DONE OR THE AMOUNT COULD NOT BE ADJUSTED FOR ONE REASON OR THE OTHER. THE ASSES SING OFFICER OBSERVED THAT SINCE THE CONDITION LAID DOWN UNDER SECTION 36(2) WAS NOT SAT ISFIED THE CLAIM MADE BY THE ASSESSEE COULD NOT BE ACCEPTED. ACCORDINGLY THE ADDITION OF RS.3 08 890/- WAS MADE. 9. ON APPEAL IT WAS SUBMITTED BY THE LD. AR OF THE ASSESSEE THAT THE AO WAS CONFUSED WITH THE FACTS OF THE CASE SINCE SHE HAD MAINLY REL IED UPON THE EARLIER YEARS' ORDERS. HE HAD POINTED OUT THAT EVEN IN EARLIER YEARS THE LD. CIT (A) HAD DELETED THE ADDITION MADE BY THE AO IN RESPECT OF BAD DEBTS. AS REGARDS THE AMOUNT OF RS.35 568/- DUE FROM SHRI SATISH KUMAR SHARMA IT WAS SUBMITTED THAT THE AMOUNT WAS THE OU TSTANDING IN THE CASE OF M/S. GARUDA FINANCE A NON-BANKING FINANCE COMPANY RELATING TO AY 2002-03 WHICH MERGED WITH SAINIK AUTOMOBILES LTD. ALONG WITH OTHER SEVEN COMPANIES V IDE HIGH COURT ORDER DATED 11/09/2002 RESULTING INTO M/S. SAINIK MINING AND ALLIED SERVIC ES. M/S. GARUD FINANCE LTD. HAD LENT RS.35 578/- TO MR. SHARMA DURING 2002-03 BEFORE ME RGER IN THE ORDINARY COURSE OF MONEY LENDING BUSINESS AND THEREFORE SECOND CONDITION O F SECTION 36(2) WAS SATISFIED. AS REGARDS RS.1 91 600/- IT WAS SUBMITTED THAT THE AMOUNT REPR ESENTED THE DE-ESCALATION IN RATES BY BSES LTD. OUT OF MONEY DUE TO GARUDA TRANSPORT LTD. WHICH MERGED WITH THE ASSESSEE. THE AMOUNT WAS EARLIER REFLECTED AS RECEIPTS BUT BECAM E BAD DEBT AND IRRECOVERABLE. THEREFORE THE CONDITION OF SECTION 36(2) WAS SATISFIED. IT W AS ALSO SUBMITTED THAT THE AMOUNT OF RS.44 000/- REPRESENTED THE SECURITY DEPOSIT WITH N TPC TELCHER DEDUCTED OUT OF EARNING OF PREVIOUS YEAR'S WORK DONE BY SAINIK TRANSPORT LTD. WHICH BECAME IRRECOVERABLE. THE AMOUNT WAS SHOWN RECEIPT EARLIER AND HAD BEEN WRITT EN OFF AS BAD DEBT. AS REGARDS THE AMOUNT OF RS.36 202.88 IT HAS BEEN SUBMITTED THAT T HESE AMOUNTS REPRESENT THE DEBIT BALANCES TO VARIOUS PARTIES WHICH COULD NOT BE REC OVERED AND HAD BECOME BAD. THE ASSESSEE COMPANY HAD TAKEN THE SALE OF THE ITEMS IN THE INCO ME OF THE PREVIOUS YEAR. THEREFORE THE AMOUNT OF RS.36 202.88 WAS ALLOWABLE AS DEDUCTION. THE LD. CIT (APPEALS) AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AND ON APPRECI ATION OF FACTS CAME TO THE CONCLUSION THAT THE ASSESSEE COMPANY HAD FULFILLED THE CONDITI ONS LAID DOWN UNDER SECTION 36(2) THAT EITHER THE AMOUNTS WERE SHOWN EARLIER AS RECEIPTS O R THE AMOUNT WAS GIVEN AS LOAN DURING THE ORDINARY COURSE OF MONEY-LENDING BUSINESS BY THE ER STWHILE COMPANY WHICH WAS MERGED I. T. APPEAL NO. 3008 (DEL) OF 2007. 7 WITH THE ASSESSEE. THEREFORE THE ASSESSEE WAS ENT ITLED FOR DEDUCTION UNDER SECTION 36(1)(VII) READ WITH SECTION 36(2) OF THE ACT. HE ACCORDINGLY DELETED THE ADDITION OF RS.3 08 980/-. 10. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. FROM THE FACTS STATED ABOVE IT IS CLEAR THAT THE A MOUNTS WRITTEN OFF AS BAD DEBT WERE EARLIER GIVEN EITHER AS LOAN IN THE ORDINARY COURSE OF MONE Y LENDING BUSINESS BY THE ERSTWHILE COMPANY WHICH GOT MERGED WITH THE ASSESSEE COMPANY OR ENTERED IN COMPUTATION OF INCOME IN EARLIER YEARS. SOME OF THE AMOUNTS REPRESENT T HE SALE PROCEEDS OR SECURITY DEPOSIT OUT OF THE WORK DONE EARLIER. THEREFORE THE ENTIRE AMOUNT HAS BEEN TAKEN AS INCOME IN EARLIER YEARS OR REPRESENTS THE MONEY LENT IN THE ORDINARY COUR SE OF MONEY LENDING BUSINESS. HENCE THE CONDITION OF SECTION 36(2) STANDS SATISFIED. THE L D. CIT (A) HAS THEREFORE RIGHTLY DELETED THE ADDITION. HENCE NO INTERFERENCE IN THE ORDER PASSE D BY LD CIT(A) IS CALLED FOR. 11. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 29TH JANUARY 2010. SD/- SD/- [ D. R. SINGH ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 29TH JANUARY 2010. *MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT 4. CIT (APPEALS) 5. DR ITAT NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR ITAT. I. T. APPEAL NO. 3008 (DEL) OF 2007. 8 I. T. APPEAL NO. 3008 (DEL) OF 2007. 9