manufacturing of felts which are used in paper industry. The assessee filed return on 28.11.2006, declaring taxable income of Rs. 17,48,86,985/-. The assessment was finalised under Section 143(3) of the Act at an income of Rs. 17,77,07,220/-. It was found by the assessing officer that the assessee had mentioned a sum of Rs. 40,38,892/- under the head ‘Building Repair Expenses’. Out of this, expenditure of Rs. 24,33,772/- was held to be of capital nature and, therefore, 10% depreciation was allowed thereon. The assessing officer, thus, after considering the matter ordered disallowance of a sum of Rs. 21,90,435/- being expenses of capital nature by order dated 22.12.2008. The assessing officer further ordered disallowance of a sum of Rs. 2,50,000/- out of the total amount claimed by the assessee under the head “Software Expenses”. Yet another disallowance was made by the assessing officer, i.e. of an amount of Rs. 3,79,802/- out of the total claim of the assessee on account of bad debts under the head ‘irrecoverable balances written-off”. The Commissioner of Income-tax (Appeals) {in short “the CIT(A)”} dismissed the appeal preferred by the assessee, by order dated 15.9.2009. The assessee carried further appeal before the Tribunal. The Tribunal accepted the plea of the assessee, vide the order under appeal and this is how the Revenue is now in appeal before this Court.
