TaxTMI 
TaxTMI 
2026 (2) TMI 1465
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....t confirms the order of the Assessing Officer. 2) That the Learned CIT (Appeals) has grossly erred in confirming an addition of Rs. 35,92,16,124/- (out of Rs. 50 crores made by the assessing officer) provided by the assessee for eviction, shifting and rehabilitation of illegal hutment in and around the technical area of airports. 3) Without prejudice to above ground no. 2 that the addition sustained by the Learned CIT(A) deserve to be deleted, the Learned CIT (Appeals) has grossly erred in confirming an addition of Rs. 6,54,16,124/- from out of the above addition Rs. 35,92,16,124/- for alleged want of documentary evidence in support of the claimed payment ignoring the fact that the Airports Authority of India is fully owned by the Government of India and is also subject to audit by C&AG. 3. Learned CIT(DR) next invites out attention to the CIT(A)'s detailed discussion partly disallowance/addition as under: "7. Ground no. 3: The appellant has challenged the addition of Rs.50,00,00,000/-made by the AO on account of provision for rehabilitation by stating that provision is not an ascertained liability and the expenditure is capital in nature. Assessing Of....
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....17 and 18 of the said order. The directions of the Hon'ble Delhi High Court are reproduced hereunder: "17. No doubt, having regard to the judgement of the Apex Court in Bharat Earth Movers Vs. CIT, 245 ITR 428 which laid down that the liability should have been actually incurred in the year and it should be capable of reasonable ascertainment, the assessee is to prove that such a liability had actually been arrived at that no such ascertainment of liability could be proved by the assessee. To that extent the order of the Tribunal cannot be faulted with. However, it would be necessary to mention at this stage that certain documents were produced before us by the learned counsel for the assessee to show that amount of Rs. 16.01 crores in the assessment year 1998-99 was in fact paid and similar amounts were paid in other years as well. Once we have held that such amounts are paid, these are admissible deductions being revenue in nature, we answer the question no.1 in favour of the assessee and against the Revenue. At the same time, we hold that the deduction would be allowed by the Assessing Officer only after the assessee furnishes proof of having made such a payment in ....
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....ara 17 and 18 of its order for A.Y. 1998-99. It is also submitted by the appellant that Hon'ble Delhi High Court vide its order for A.Y. 1998-99 vide para 14 of the said order has held that such expenditure if incurred by the assessee would be on revenue account and is not capital in nature. The observations made by the Hon'ble Delhi High Court in the said order vide para 13, 14 and 15 are reproduced hereunder. "13. When we apply the aforesaid test laid down by this Court as well as the ratio of Bikarner Gyupaum (supra) to the facts of this case, a conclusion would be that the expenditure in question by the assessee was revenue in nature it is not in dispute that the land belongs to the assessee. Certain encroachers in all these airports had encroached upon the part of the land, in the schemes formulated by the Government for removal of these encroachers and rehabilitate them at other places, if the assessee had paid the amount that amount is not for acquisition of new assets. The payment was made to facilitate its smooth functioning of the business ie, in relation to carrying on the business in a profitable manner. 14 We are therefore of the opinion that ....
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....rt as well as Delhi Tribunal in appellant's own case. Hence, it is held that the actual expenditure incurred by the appellant on eviction, rehabilitation and shifting would be on revenue account. During the course of appellate proceedings, the AR of the appellant brought to my notice that during the year the appellant has incurred an expenditure of Rs.20,62,00,000/- towards rehabilitation, eviction. The details of such expenditure are as under: Particulars Amount (In. Rs) Date of payment Page no of compilation Payment towards rehabilitation of Mumbai Project 6,67,75,000/- 27" September 2005 4 Payment towards development of land at rangpuri for resettlement of village Nangal Dewat, Delhi 3,22,34,335/- 26 June 2007 5-6 Payment towards development charges of land at rangpuri for resettlement of village Nangal Dewat, Delhi 2,50,00,000/- 6" June 2008 7 Payment towards rehabilitation of Slum dwellers at Rafiq Nagar, Mumbai 1,67,74,541/- 18 March 2009 8 Total 14,07,83,876/- The appellant has submitted that it is in process of procuring the evidence for expenditure amounting to R....
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....'s pleadings all along as well as the Revenue's vehement contention supporting the CIT(A)'s above extracted impugned discussion. It is made clear that there does not appear to be much a dispute between the parties that the assessee, namely, M/s. Airport Authority of India, a public sector undertaking, had been regularly making a provision towards such rehabilitation charges etc. in its books in each assessment year on account of various exigencies towards clearing land title and encroachments etc. And that it is such a provision of Rs.50 crores which has been allowed to the extent of Rs.14.87 crores only in the CIT(A)'s order on account of the assessee' failure to file all the relevant details, payment vouchers etc. 5. That being the case, we are of the considered view that so far as allowability of the impugned provision in principle is concerned, the same already stand resolved in the assessee's favour going by Bharat Earth Movers(supra). And that its impugned claim has been accepted in the past going by the hon'ble jurisdictional high court's decision as well as the intervening developments. Learned CIT(DR) at this stage, seeks to buttress the point that given the fact tha....