2016 (12) TMI 790

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....red to as 'the Tribunal'), the revenue has preferred the present Tax Appeals assailing the following orders Tax Appeal No. Date of Tribunal's order ITA No. Assessment Year 1095/2006 03/06/03 1744/Ahd/1997 1993-94 1096/2006 03/06/03 1745/Ahd/1997 1994-95 1097/2006 27/09/05 3791/Ahd/2002  1996-97 1098/2006 27/09/05 1705/Ahd/2003 1997-98 786/2007 06/09/06 1665/Ahd/2006 1993-94 1433/2008 31/10/07 4192/Ahd/2003 1999-00   1.1 These matters were admitted by this Court for consideration of the following substantial question of law: TAX APPEALS NO. 1095 & 1096 of 2007 Whether on the facts and circumstances of the case, the Appellate Tribunal was right in law in allowing deduction of payment of the ONGC, whe....

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....dditional item of machinery ? TAX APPEAL NO. 1098 OF 2006 "[A] Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing deduction of payment to the ONGC, when the whole contractual liability was in dispute before the Hon'ble Supreme Court ? [B] Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing depreciation on all the items of air pollution control equipments and energy saving devices, despite the qualifying effect of the word ? being? used at item number III(2)(iv) and III(3)(iii) of the Appendix-I to the Income Tax Rules, restricting 100 % depreciation to items specified under the general category of air pollution control equipments a....

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.... advocate appearing for the revenue submitted that the Tribunal ought to have appreciated that the payment made was not towards liability for payment of gas charges but was of the nature of advance or deposit and could not be allowed as revenue expenditure under the mercantile system of accounting followed by the assessee. 2.1 Mr. Soparkar, learned advocate for the assessee has submitted that deduction should be allowed on payment basis since the assessee had accepted and admitted the liability. He submitted that the acceptance of liability by the assessee is established by the fact that there was actual outgo from the pockets of the assessee by way of payment to ONGC. The said payments were in no way retrievable or to be received back by ....

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....ive basis shall not be granted. Considering the decisions cited hereinabove, we are of the view that issue raised in both these appeals is required to be answered in favour of the assessee and against the revenue. The appeals are dismissed accordingly. 3. So far as Tax Appeal No. 1097 of 2006 is concerned, question no. 1 has already been discussed and answered in favour of assessee. So far as question no. 2 is concerned, it relates to rejection of claim to allow deduction u/s 43B in respect of the payments made beyond the due dates under the relevant Acts. The said issue is now squarely covered by the decision of the Apex Court in the case of Commissioner of Income-tax vs. Alom Extrusions Ltd reported in [2009] 185 Taxman 416 (SC) wherein ....