TaxTMI 
TaxTMI 
2013 (2) TMI 949
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1) On the facts and circumstances of the case, the learned CIT(A) failed to appreciate the findings of the A.O. that the provision towards accrued expenditure on account of closure of mines is only imaginary and hence an unascertained liability and the same has not been crystalised during the year under consideration. 2) Any other ground that may be raised at the time of hearing. Assessee has raised following grounds of appeal (ITA/132/NAG/2012-AY.2007-08) : 1) On the facts and circumstances of the case the Hon'ble Commissioner of Income Tax (Appeals)-I was unjustified and arbitrarily in not allowing the Provision of Rs .38,79 128/- made on account of "Pay Revision of Executives". 2) That the Hon'ble Commis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....allowed. After considering the submissions of the assessee, AO held that the assessee had created the liability for the future planning, that same was unascertained, not accrued and incurred, that merely the provision of the same was made for the future expenditure, that quantum of work undecided, that actual activity for reclamation work i.e., closures of mine had not started during the relevant year, that simple provision for unascertained liability for future expenditure could not be allowed, that in spite of repeated disputes assessee was following same method of accounting, that expenditure could not be considered accrued/determined and incurred for the business purpose during the year under consideration. Finally, he disallowed the cl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uted by the revenue. Under these facts, in our opinion, no interference is called for in the order of the CIT(A) and CIT(A) has rightly deleted the disallowance made by the assessing officer. This is not a fit case, which warrant our interference. We accordingly dismiss the ground taken by the revenue and confirm the order of the CIT(A). Respectfully following the order for the AY 2006-07, we decide the issue against the AO. Appeal filed by the AO stands dismissed. ITA No. 132/NAG/2012-AY.2007-08 5. In the appeal filed by the assessee-company there are three grounds of appeal, but during the course of hearing AR submitted that appellant did not want to press Ground No.3. Therefore, same is treated as dismissed. Grounds no.1 and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....horities. 8. We have heard the rival submissions and perused the material before us. We find that similar issue has arisen on earlier occasion also. In the appeal decided by the Tribunal for the AY 1997-98 (ITA No. 74/NAG/2000 dt. 26-08-2005). Following Grounds of Appeal, were raised "The Commissioner of Income Tax (Appeals) was wrong in deciding that the Assessing Officer was correct in disallowing the claim of Rs. 54,61,734/- on account of 'provision for salary and wages'. The Commissioner of Income Tax (Appeals) was wrong in upholding the addition of Rs. 54,61,734/- being provision for salary and wages on the ground that the liability is not crystalised in financial year 1996-97. Before deciding the appeal, Tribun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....issed." After deliberating upon the arguments of both the sides Tribunal decided the matter in favour of the assessee. In paragraphs 11-13 of the said order Tribunal held as under: "..we have considered the rival submissions, perused the record and find substantial force in the argument of the Counsel for the assessee. In the facts of the present case the assessee has made provision for increment in salaries and wages on the recommends of 5th Pay Commission to Central Government on 30/1/1997. the assessee has made the Provision as a Prudent businessman in respect of known liability. The provision for salaries and wages made is in relation to services rendered by the employees during the year ending 31/3/1997. The incremental wag....