TaxTMI 
TaxTMI 
2017 (4) TMI 1529
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....g called out for hearing, fairly concedes that grounds of appeals nos. 2 and 4 are covered against the assessee, by the order dated 24th January 2013 passed by this Tribunal, in assessee's own case for the assessment year 2005-06. He, therefore, submits that these two grounds of appeal are to be decided against the assessee, at this forum, as on now, and the matter can now only be taken up at the higher forums, if so advised. These two grounds of appeal are as follows: "2. The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 7,22,40,666/- made on reconditioning of buses treating the same as capital expenditure, without properly appreciating the facts of the case and the material brought on record. 4. The Ld. CIT(A)....
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.... discovered that in many cases the compensation award by Motor Accidents Claim Tribunal (MACT) was given much earlier, but assessee did not create any provision or liability at that point of time. On these facts, therefore, the Assessing Officer declined the deduction. In appeal, however, learned CIT(A) did not approve this approach of the Assessing Officer, and held as follows: "I have carefully considered the facts of the case, the assessment order and the written submission of the appellant. The AO has disallowed payment made towards motor accident claims as it was held by him that the expenditure did not pertain to the year under consideration. The appellant has submitted that as per the consistent accounting policy the claims are bei....
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....ll the facts of the issue I'm inclined to accept the submission given by the appellant. The claim of the appellant that the liability crystallizes only after the award by the MACT and the payment is made thereafter is correct. The appellant cannot make a provision merely on the basis of claims made by the disputed party. The provision made on that basis would be totally erroneous and without any basis. The disputed liability can only be crystallized after the award of the court which decides the matter. Accordingly the claim of the appellant is acceptable. It is further observed that the accounts of the appellant are audited by the C&AG and these figures have been duly certified by them. The AO is however directed to verify the claim of....
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....d, as assessee does not anyway gain anything from delaying accounting for these claims, we see no reasons to reject the claims merely because these claims are accounting for, in the books of accounts, at a point of time later than awards being granted i.e. when the assessee gets to know about the same. In any event, the CIT(A) has given a categorical direction to the Assessing Officer for verification of claim on account of the liability having been crystallized in the relevant previous year. Grievance of the Assessing Officer, regarding crystallization of liability, does not, therefore, survive any longer. In view of these discussions, as also bearing in mind entirety of the case, we approve the conclusions arrived at by the CIT(A) and dec....