Writing off of Input Cenvat Credit - consequential to a departmental service tax audit - whether an allowable expenditure under section 37(1)

Facts:

Assessee wrote off input cenvat credit post facto a service tax departmental audit. Revenue's contention was that the same was not an allowable expenditure as it was not offered to tax in earlier years due to assessee following the exclusive method of accounting. Assessee's plea was that it was writing off an advance which arose out of a business thus allowable under section 37(1). On appeal against the views of AO and DRP -

Held in favour of the assessee that input cenvat credit which had to be written off was a business expenditure allowable under section 37(1).

Applied:

Mohan Spg. Mills v. ACIT reported as (2012) 54 SOT 524 (Chd.) : 2012 TaxPub(DT) 2795 (Chd-Trib)

Case: NEC Technologies India (P) Ltd. v. Addl. CIT 2023 TaxPub(DT) 3811 (Del-Trib)