TaxTMI 
TaxTMI 
2017 (5) TMI 110
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.... currency fluctuation gain of Rs. 31,50,972/-. 2. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) has erred in allowing deduction U/s 80IE of the Act in respect of income of Rs. 68,397/- earned by way of excess provision written back." 2. Both the grounds of the revenue's appeal are interlined and are against allowing the deduction U/s 80IE of the Income Tax Act, 1961 (in short the Act). The brief facts of the case are that the assessee is a joint venture firm between Om Metals Infra project Ltd. and JSC(JV), Ukrain. It has been awarded a work of manufacturing, fabrication, erection and commissioning of Penstock, Steel Liners, steel Radial gates of Hydro mechanical work/equipments in the State....
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....ly, the AO did not consider miscellaneous income on account of excess provision written back : Rs. 68,397/-, currency fluctuation : Rs. 31,50,972/- as a part of manufacturing income and thereby made the additions and determined the total income at Rs. 32,19,369/- against returned income of Rs. Nil. (iii) During the appellate proceedings, it was submitted by the appellant that the provisions were made for the expenses incurred in that year, but not paid due to same technical reasons. In its case, the deduction U/s 80IE has been allowed since its inception, hence the provision made in earlier year was made for some expenses and in that year net income even after this provisions was not taxable. As such, this is the expenditure which ....
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....ly considered the submissions of the appellant, assessment order and the material placed on record. It is noted that for the AY 2011-12, in the case of the appellant itself in ITA No. 459/13-14, vide order dated 29.12.2014, the Ld. CIT(A) has allowed deduction u/s 80IE of the Act in respect of excess provision written back and gain on foreign currency fluctuation, which was upheld by the Hon'ble ITAT, Jaipur vide its order dated 16.06.2016 in ITA No. 160/JP/2015. The relevant extracts of the above referred order of Hon'ble ITAT are reproduced as under: "4.3. We have heard rival contentions and perused the material on record. The Id. CIT (A) in para 3.3.2. has given the finding of fact as under: "I have duly considered AO's....
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.... case and also applicable legal position. The amount written off pertains to sundry creditors. It's an excess provision made for some expenses, not made in the current year but booked excess in earlier years and once it is reversed i.e. written back, assessee has to offer for taxation. This is perfectly correct as per accountancy principle. As such, this is the expenditure, which has been booked in excess in earlier year and by this amount the deduction u/s 80IE has been reduced in the said year since the deduction is available for the unit for consecutive 10 years. In view of facts and circumstances discussed above, AO's action in treating the excess provision written back as income of Rs. 63,899/- cannot be justified, hence deleted." ....