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2023 (5) TMI 1111 - AT - Income TaxProvision made to Shahenshah Scheme - whether contingent liability and therefore not allowable for deduction? - HELD THAT - Co-ordinate Bench of Tribunal, while deciding identical issue in assessee s own case for A.Y. 2006-07 has given a finding that the provision created by the assessee is on a scientific basis. Before us, no distinguishing feature in the facts of the case under consideration and that of earlier years has been pointed by Revenue. Revenue has also not placed any material to demonstrate that the order in assessee s own case for earlier years has been set aside/stayed/overruled by higher judicial forum. No reason to interfere with the order of CIT(A) and thus the grounds of Revenue is dismissed.
Issues involved: Appeal against order dated 27.05.2022 passed by Commissioner of Income Tax (Appeals) - 27, New Delhi for Assessment Years 2015-16 & 2017-18.
Issue 1: Treatment of provision made for "Shahenshah Scheme" - Facts: Assessee, a company engaged in manufacturing, filed return of income for A.Y. 2015-16 declaring total income. Search operation u/s 132 of the Act was conducted, leading to notice u/s 153A and subsequent assessment with disallowance of provision for "Shahenshah Scheme" as a contingent liability. - CIT(A) Decision: Deleted the addition based on Tribunal's decisions in favor of the assessee for previous years. - Grounds Raised by Revenue: Challenged CIT(A)'s deletion of the addition, arguing that the provision was a contingent liability and not allowable expenditure. - Arguments: - Revenue: Contingent liability not allowable; no basis provided for creation of provision. - Assessee: Previous Tribunal decisions in favor; no fault on CIT(A)'s part. - Tribunal Decision: Found no distinguishing features from previous cases, upheld CIT(A)'s decision based on scientific basis of provision. No interference with CIT(A)'s order warranted. - Result: Revenue's appeal for A.Y. 2015-16 dismissed. Decision in A.Y. 2017-18 aligned with the outcome for A.Y. 2015-16. Both appeals of Revenue dismissed. Separate Judgment: Not applicable.
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