Indian Potash Limited Vs DCIT (ITAT Delhi)
Bad Debt Claim Allowed as Section 36(2) Covers Income Recognised in Same or Earlier Year; Revenue’s Challenge to Higher Depreciation on POS Machines Rejected Due to Binding Precedent; Higher Depreciation on SAP Licence Upheld Because Software Qualified for Applicable Rate; ITAT Rejects Disallowance of Subsidy Write-Off Because Unrecoverable Amount Could Not Remain Taxable Income.
The assessee and the Revenue filed cross appeals against the order of the Commissioner of Income Tax (Appeals), Delhi-23, for Assessment Year 2018-19. The Revenue challenged the deletion of disallowances relating to depreciation on POS machines, depreciation on SAP licences, and bad debts. The assessee challenged the disallowance of bad debts amounting to ₹25,90,391.
The Assessing Officer (AO) disallowed excess depreciation of ₹88,67,868 by holding that POS machines were eligible for depreciation at 25% instead of 40%. The assessee relied on the decision of the Delhi High Court in Pr. CIT vs. Connaught Plaza Restaurant Pvt. Ltd., which held that POS terminals were eligible for higher depreciation. The Tribunal observed that the issue stood covered in favour of the assessee by the Delhi High Court, which had upheld the Tribunal’s view allowing depreciation at 60% on POS terminals. Following the precedent, the Tribunal dismissed the Revenue’s ground.
