9911796707
TMI Blog2015 (6) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Power generation is not the new business of the assessee. It is evident that the assessee disclosed income to the tune of ₹ 270,38,23,066=24, from sales, services and operation, etc. The assessee rendered services to the extent of ₹ 95,02,33,220, the nature of business shown by the assessee is manufacturing / trading in diesel engine, trading in engineering goods and other engineering services. Thus, it can be concluded that it is not the new business of the assessee. - Decided in favour of assessee. Addition for provision of trade guarantee to book profit computed u/s 115JB - Held that:- actuarial valuation report was not filed by the assessee before the Assessing Officer. Therefore, we remand this issue to the file of the Assessing Officer to examine the claim of the assessee and decide in accordance with law. The assessee be given opportunity of being heard with further liberty to furnish evidence, if any, in support of its claim. - Decided in favour of assessee for statistical purposes. - ITA NO.2695/Mum/2012 - - - Dated:- 5-6-2015 - Shri Joginder Singh and Shri N.K. Billaiya,JJ. For the Petitioner:Shri N.V. Nadkarni For the Respondent:Shri J.D. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional belief of the assessee that such and such amount of liability may accrue on account of repairs during the warranty period. Since the method followed by the assessee is not evident, from the wide discrepancy in the figure of actual liability and provision, the various decisions cited by the assessee are also not applicable to the facts of the present case. Relying on a couple of decisions, the Assessing Officer disallowed the amount of ₹ 1,41,92,093/- being in the nature of contingent liability. After deducting actual expenditure of ₹ 64,33,230/- incurred by the assessee he disallowed an amount of ₹ 77,58,863/-. 3 In appeal, the CIT(A) following the order of his predecessor for Assessment Year 1991-92 upheld the action of the Assessing Officer and held that provision of trade guarantee debited in the books of account is not an ascertained liability and hence it does not qualify for deduction. He, however, directed the Assessing Officer to give deduction to the assessee of the actual expenditure incurred in respect of trade guarantee performance during the earlier year. 4 Aggrieved by such order of the CIT(A), the assessee is in appeal here before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld DR, this ground by the assessee is allowed. 2.2 If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsels and conclusion drawn by the Tribunal for the assessment year 2005-06, if kept in juxtaposition and analyzed, we find that identically, the Tribunal has placed reliance upon the decision of the Tribunal for the assessment year 2004-05, wherein a detailed deliberation has been made on identical facts / issue. In the absence of any contrary material or any case law cited by the Revenue against the assessee, on the reasoning contained in the aforesaid order / earlier order of the Tribunal, we allow this ground of the assessee. 3. The next ground pertains to disallowance of provision for trade guarantee written-back of ₹ 64,85,216. The crux of argument advanced on behalf of the assessee is that the learned Commissioner of Income Tax (Appeals) has not dealt with this issue though raided by the assessee, however, pointed out that if ground no.1, is decided in favour of the assessee, then automatically this grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have considered the rival submissions and perused the material available on record. The totality of facts clearly indicates that the assessee is in the business of generation of power. Broadly, the power is generated either through water (electricity) or generator set and also through wind (wind energy / electricity). The assessee is manufacturing generators through which the power is generated and such generators are used by the customers. Thus, we are not in agreement with the observation of the Assessing Officer that power generation is not the regular business of the assessee because the assessee is manufacturing generators which are used for power generation. The Assessing Officer has also observed that these are pre-operative expenses. We are not agreeing with this observation also because the assessee is in the business of power generation for the last about 50 years, therefore, how these can be treated as pre-operative expenses. More specifically when the Assessing Officer himself has observed that the amount was paid to the consultant in connection with feasibility report on power generation, as is evident from Para-10.3 of the assessment order. Power generation is not t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
