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TMI Blog2017 (3) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... 2002-03 to 2007-08. The issue that the appellant has actually added back the provision of leave encashment for all the years 2002-03 to 2007-08 is verified from these documents. The ld. CIT(A) has put forth a speaking order wherein the records itself being verified by the First Appellate Authority and it also finds mention in the order itself that the assessee has not claimed any provision for leave encashment written back as deduction in any of the previous year starting from A.Y.2002-03 and onwards. There is also that the total addition made by the assesse during A.Y.2002-03 to 2007-08 under the provision of section 43B(f) of the Act exceeds the claim made by the assessee on account of the reversal and therefore the claim of the assessee is to be allowed. That on these observations we find acceptance with the order of the ld. CIT(A) and the relief granted to the assessee is hereby sustained. This ground of appeal by the revenue is dismissed.- Decided in favour of assessee Addition on account of provision of doubtful debts - AO disallowed the claim as he assessee has taken the write off provision of doubtful debts in the profit and loss account but in the computation of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y.2008-09 are as follows :- 1. That on the facts and circumstances of the case, Ld. CIT(A) has erred in law in directing the A.O. to delete the addition of ₹ 14,22,257/- without appreciating the fact that mere defect in Books of Account or not making any adverse report by the Tax Auditor cannot be the parameter to delete any addition. 2 That on the facts and circumstances of the case, Ld. CIT(A) has erred in law in deleting the addition of ₹ 59,38,672/- on account of provision for leave encashment based on the primary view taken by the Supreme Court at the time of admission of SLP against the decision of Calcutta High Court in the case of Exide Industries. 3. That on the facts and circumstances of the case, Ld. CIT(A) has erred in law in deleting the addition of ₹ 11,35,554/- on account of provision for doubtful debts written back based on facts and submission not produced before the A.O. during the course of assessment. 4. That the appellant craves for leave to add, delete or modify any of the grounds of appeal before or at the time of hearing. 4. The crux of the grounds of appeal are similar. Therefore for the sake of convenience w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6280767 (iv) Closing stock as on 31.03.2009 5751022 885035 (v) Shortage/(Excess)[adjusted against consumption) 142114 (0.2967%) 627 (.0099%) 6. From the above chart it is clear that even during A.Y.2009-10 the shortages in oil and grease were purely acceptable normal loss of 0.5% even otherwise it is established beyond doubt by various authorities of the Government _that shortages do arise in view of the nature of the business of oil and grease. Packing in smaller containers for retail sale also results in shortages. That considering all these factual aspects and practicalities the ld. CIT(A) held that shortages arise in a normal course of business of the assessee company and incidental to the very nature of the business. Therefore unexplained shortage of closing stock of ₹ 79,03,108 does not arise and there should be no addition made on this account. The ld. CIT(A) further opined that the finished products of the assessee company is an excisable product which has to be duly entered in the appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the above, to maintain the equity provision for leave encashment written back of ₹ 14,41,000/- is disallowed. 9. The assessee stated that the company has not claimed provision for leave encashment as deduction during the relevant previous year as alleged by the AO in his order u/s 143(3) of the Act. Further it was also stated before the First Appellate Authority that the assessee vide order dated 26th December, 2011 filed before the AO clarified during the assessment proceedings that provision for leave encashment written back was claimed as deduction as the assessee previously by following the provisions of section 43B(f) of the Act added back the entire provision for leave encashment while computing the total income of the assessee. Accordingly it was prayed before the ld. CIT(A) that the provision for leave encashment written back which was claimed as deduction by the assessee during the relevant previous year otherwise the same would tantamount to double taxation. The ld. CIT(A) in his order observed that the company duly added back the entire provision for leave encashment from A.Y.2002-03 to 2007- 08 by following the provision of section 43B(f) of the Act. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the assessee on account of the reversal and therefore the claim of the assessee is to be allowed. That on these observations we find acceptance with the order of the ld. CIT(A) and the relief granted to the assessee is hereby sustained. This ground of appeal by the revenue is dismissed. 11. The next ground of appeal relates to deletion of ₹ 13,54,419/- on account of provision of doubtful debts. The AO disallowed the claim of the assessee by stating that in his order u/s 143(3) of the Act that the assessee has taken the write off provision of doubtful debts in the profit and loss account but in the computation of income has taken it out of income which is not permissible as per the accounting policy since it is not an ascertained liability and as well as Sec.36(2)(i) of the Act is not applicable. Since the assessee is not carrying on money lending business in the ordinary course of business the amount of ₹ 13,54,419/- has to be disallowed for computation. That before the ld. CIT(A) the assessee stated that the company has not claimed the provision for doubtful debt as deduction during the relevant previous year as alleged by the AO in his order u/s 143(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee and then taken a decision which therefore is based on facts. The decision based on the facts on record cannot be denied or negated. Therefore we find acceptance in the order of ld. CIT(A) on this issue and relief granted to the assessee is sustained. This ground of appeal by the revenue is dismissed. 13. Ground No.4 in the A.Y. is general in nature and therefore needs no adjudication. 14. Now we take up A.Y.2008-09. The first ground relates to the deletion of addition of ₹ 14,22,257/- on account of shortage of closing stock. This issue for A.Y.2009-10 is already adjudicated in favour of the assessee and the same shall follow. This ground of appeal by the revenue is dismissed. 15. The second ground of appeal relates to the addition of ₹ 59,38,672/- on account for provision for leave encashment. At the very outset the ld. AR at the time of hearing rectified that the figure is ₹ 14179276 on this account. The ld. AR further submitted that there is an appeal pending before the Hon ble Supreme Court on this issue and this is yet to be decided. That on the basis of the submission of the AR regarding this issue when the matter is pending before the Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X
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