TaxTMI 
TaxTMI 
2016 (2) TMI 572
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.... the Tribunal is justified in deleting the addition made by the Assessing Officer on account of redelivery of aircraft under normal provision of the Act of Rs. 3,03,04,750/- 4) Whether on the facts and in the circumstances of the case and in law the Tribunal is justified in deleting the addition made by the Assessing Officer under normal provision of law on account of provision for redelivery of aircraft of Rs. 1,67,50,541/-? 5) Whether on the facts and in the circumstances of the case and in law the Tribunal is justified in deleting the addition made on account of accumulated provision on account of redelivery of aircraft acquired on operating lease at Rs. 3,28,55,249/- 6) Whether on the facts and in the circumstances of the case and in law the Tribunal is justified in deleting the addition of 19,47,65,816/- made by the Assessing Officer on account of treating the provision for obsolescence of as contingent liability while computing profit u/s 115JB? 7) Whether on the facts and in the circumstances of the case and in law the Tribunal is justified in deleting the addition made on account of depreciation on aircraft acquired on hire purchase at Rs. 98,42,67,988? 8) Whether....
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....2006) 5 SOT 0616) and also by this Court in the case of Commissioner of Income Tax, Delhi v/s Nagri Mills Co. Ltd reported in 1958 (33) ITR page 681. The issue was therefore restored to the Assessing Officer for verification. (c) The grievance of the Revenue is that as no evidence was produced before the authorities, the prior period expenses should have been disallowed. (d) We find that the impugned order of the Tribunal has in fact restored the issue to the Assessing Officer to allow the prior period expenditures/ expenses subject to verification. This verification would involve satisfaction of genuineness of the claim. Therefore, in our view, no fault can be found with the impugned order on the above issue. (e) Thus Question (1) does not give rise to any substantial question of law and is not entertained. 4 Regarding Question 5: (a) The Respondent-Assessee had made a provision of Rs. 3.28 Crores up to 31st March, 2005 in respect of expenses likely to be incurred on redelivery of the four air crafts taken on lease. During the relevant assessment year, the lease period in respect of the four aircrafts was to expire. However, the lease of the four air crafts was extended/r....
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....vant assessment year written back an amount of Rs. 1,16,43,548/- on account of excess provision made in earlier years. This on account of inventory and treated the same as prior period income. However, subsequently, the Appellant realized that the amount written back was excessive to the extent of Rs. 68.50 lacs and accordingly, reduced that amount from the prior period income. The Assessing Officer did not accept the reduction of an amount of Rs. 68.50 lacs by rectification and held it to be a part of prior period income which he subjected to tax. (b) Being aggrieved, the Respondent preferred an Appeal to the CIT(Appeals). The CIT(Appeals) on examination of the facts noted that the Appellant had subsequently realized that the amounts which were written back on account of provision for inventory were excessive to the extent of Rs. 68.50 lacs and accordingly reduced the same from the amount written back on account of provision for inventory amount to Rs. 116 lacs. This was by way of reversal entry in its books of account. The CIT (Appeals) also placed reliance upon the certificate of the tax auditors in Annexure-XIII in Form-3CD to conclude that the amount of Rs. 68.50 lacs was ....
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....ent finding of fact has not been shown to be in any way perverse and/or arbitrary to give rise to any substantial question of law. Accordingly, above question is not entertained. 7 Regarding Question No.14:- (a) The Respondent-Assessee had claimed additional expenditure of Rs. 25,22,70,223/- relating to aircrafts taken on finance lease. This claim was made for the first time in revised return of income. The Assessing Officer did not accept to revised return of income and disallowed the claim made by the Respondent-Assessee. (b) In Appeal, the CIT (Appeals) held that the expenses claimed were for the use of aircrafts, and therefore, it was to carry on the business of the assessee and the expenses satisfy the condition of Section 37(1) of the Act. The CIT(Appeals) further holds that the said expenditure has been allowed in the earlier years by the Assessing Officer i.e. for the Assessment year 2004-2005, and therefore, deleted the addition of Rs. 25.22,70,223/-. (c) On further Appeal by the Revenue, the Tribunal upheld the findings of the CIT (Appeals), as the only reason for not allowing these expenses on the part of the Assessing Officer was that it was claimed only in the r....
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....sessing Officer as there was no occasion to invoke Section 41(1) of the Act. (c) On further Appeal of the Revenue, the Tribunal by the impugned order upheld the findings of the CIT(Appeals) holding that the Respondent-Assessee was the owner of these five air crafts and that depreciation has been allowed in the earlier years. The ownership of the Respondent-Assessee in respect of these aircrafts had been upheld up to the Tribunal in order passed in the earlier years. This was not the case of cessation of any liability. In the above view, the Tribunal upheld the order of the CIT(Appeals) and held that Section 41(1) of the Act would not apply. 9 It is very clear that for the purposes of Section 41(1) of the Act to apply, the allowance and/or deduction should have been allowed in an earlier assessment year and in a subsequent assessment year, the amounts so allowed was obtained either in cash or in some other manner in the subject year, then the benefit obtained is chargeable tax under Section 41(1) of the Act during the subsequent Assessment Year. In the present facts, the amount of Rs. 361.72 Crores being installment payable in the future was never claimed as a deduction/expenditu....