2025 (8) TMI 592

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.... u/s. 147 r.w.s 144 r.w.s 144B of the Income-tax Act,1961 (hereinafter "the Act") on 31.03.2022. 2. There is a delay of 154 days in filing the appeal by the Revenue. The Revenue has filed condonation petition/affidavit stating the reasons for delay in filing the appeal. We have considered the petition/affidavit of delay in filing the appeal and satisfied that there was sufficient cause for not filing the appeal within the prescribed time limit. Hence, the delay is hereby condoned. 3. The A.O in the order passed u/s. 147 of the Act has disallowed the provision for capital work in progress (CWIP) of Rs. 10,70,13,755/- towards study relating to cost savings on crude freight through single point mooring on the ground that it is unascertai....

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....e Ld CIT(A) has relied on the decision of Hon'ble Jurisdictional High Court in the case of Tamil Nadu Magnesite Ltd. vs. ACIT [2018] 407 ITR 543 (Mad.) and Hon'ble Calcutta High Court in the case of Binani Cements Ltd . The Department is in appeal against the deletion of above addition. 4. The Ld. Departmental Representative (DR) has argued that assessee has claimed these expenditures as provisions, therefore being contingent cannot be allowed as deduction. The Ld DR further argued that the assessee itself has disallowed this expenditure as unascertained liability while computing the book profit u/s. 115JB of the Act. The Ld. DR as an alternative claim has submitted that even if this expenditure was actually incurred to conduct studies, ....

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....s of accounts cannot determine the allowability of an amount which is otherwise allowable under the income tax act as settled by Hon'ble Supreme Court in the case of Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT [1997] 227 ITR 172 (SC). The Ld. AR has further clarified that the assessee-company did not add the amounts back in computing the book profits because it was an unascertained liability but because they treated it as a diminution in value of investments u/s. 115JB of the Act. The Ld. AR further submitted that there is no intangible asset created, this is merely expenses towards a study which led to ascertainment of failure. 7. We have heard the rival submissions, and perused the materials available on record. The A.O has ma....