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TMI Blog2017 (8) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... f slow moving, non-moving and obsolete stores written off during the year. (ii) That the said addition has been confirmed rejecting the explanation and evidences brought on record by the assessee. 3. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs. 14,02,00,000/- made by the AO on account of defined contribution of Pension Scheme. That the appellant craves leave to add, amend or alter any of the grounds of appeal." 2. The Revenue raised the following grounds of appeal in ITA No. 5201/Del/2014: " 1. On the facts and circumstances of the case, the Ld. CIT(A) erred in law and in facts of the case by ignoring the fact that sec. 145 of the IT Act, permits use of one type of accounting system in a particular year and mixed accounting system is not at all allowed. 2. On the facts and circumstances of the case, the Ld. CIT(A) erred in law and in facts of the case by not considering the fact that as per provisions of sec- 145 of the Act, which is mandatory for every assessee. 3. On the facts and circumstances of the case, the Ld. CIT(A) erred in law and in facts of the case by ignoring the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 010 declaring income of Rs. 247,29,13,433/-. The return was processed and the case was selected for scrutiny. Consequently, the Assessing Officer completed the assessment and assessed the income at Rs. 292,64,33,430/- by making the following additions: a. Addition on account of interest accrued on advance given to M/s. Marsan (Rs.6,48,20,000/- b. Disallowance of Demurrage Charges (Rs.6,55,00,000/-) c. Diminution of slow moving spares (Rs.4,20,00,000/-) d. Provision of retirement benefits (Rs.14,10,00,000/-) e. Provision for Defined Contribution Pension Scheme (Rs.14,02,00,000/-) 3.1 Aggrieved, the assessee filed an appeal before the CIT(A) who partly allowed the appeal and confirmed the addition of Rs. 4,20,00,000/- on account of slow moving, non-moving and obsolete stores written off during the year and Rs. 14,02,00,000/- on account of Pension Scheme. Aggrieved, the assessee as well as the Revenue is before us. ITA No. 5122/Del/2014 4. First, we take up the appeal of the assessee. Grounds no. 1 & 4 are general in nature, not need to adjudicate upon. 5. In ground no. 2(i) and (ii), the assessee has challenged the addition of Rs. 4,20,00,000/- made on account of slow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Hon'ble Jurisdictional High Court in the case of CIT Vs. Ranbaxy Laboratories Ltd. [2011] 334 ITR 341. 7.2 On the contrary, the learned Sr.DR relied on the order of the Assessing Officer. 7.3 We have heard the rival submissions and perused the relevant material on record. We find that the issue in dispute is squarely covered by the decision of Hon'ble Jurisdictional High Court in the assessee's own case (supra) wherein the Hon'ble High Court observed as under: "9. The Court is unable to accept this submission. The making of a provision to meet a contingent liability need not be in order to meet such liability entirely in the year of its creation. The provision having been made on the basis of an actuarial report, which is not shown by the Revenue to be unacceptable on the ground that it is not based on known accounting of financial principles, the mere fact that the actual pay out in a particular AY may be far less than the provision cannot provide a justification to deny the deduction. The Court concurs with the view of the CIT(A) and ITAT that the provisions does not attract Section 43B of the Act. The concurrent finding of the CIT(A) and the ITAT on the above issue does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held as under: "There is no dispute that the ICA has awarded interest to the assessee @5% p.a. on the advance made to M/s. Karsan. It is also not disputed that the assessee could not make recovery against the advance (principal amount) of Rs. 130.69 crores, an amount of Rs. 1.05 crores only could be recovered leaving balance advance of Rs. 129.64 crores which could not be recovered till date. The notational interest awarded by the International Court of Arbitration, which has now attained finality is a hypothetical income which cannot be subjected to tax. Merely because the saie amount has been awarded by way of an order, does not mean that the assessee has received such income. The assessee followed mercantile system of accounting where there cannot be a situation of hypothetical income being taxed." 13. Indeed, it is seen that no part of the advance given by the Assessee to M/s. Karsan has been able to be recovered by it. As pointed out by learned counsel for the Assessee, there was a case registered with the Central Bureau of Investigation (CBI) in that regard and any prospect of the money being recovered has all but vanished. Since no part of the principal amount could act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Hon'ble Jurisdictional High Court, we uphold the order of the learned CIT(A). Accordingly, grounds no. 5 to 8 of the Revenue are dismissed. 11. In ground no. 9 & 10 is regarding the addition made on account of provision of post retirement benefits. 11.1 Learned Sr. DR relied on the order of the Assessing Officer. 11.2 Learned counsel for the assessee submitted that this issue is also squarely covered by the judgment of Hon'ble Jurisdictional High Court in the assesee's own case for assessment year 2006-07, 2007-08, 2008-09 and 2009-10 (supra). 10.3 We have heard the rival submission of the parties and perused the relevant material on record. We find that this issue is also squarely covered by the decisions of Hon'ble Jurisdictional High Court (supra), wherein the Hon'ble Court held as under: "6. The other question raised by the Revenue concerns the provision made for superannuation/post-retirement benefits of the employees of the Assessee. The Assessee made the provision n the basis of an actuarial report. Its consistent stand was accepted by the Commissioner of Income Tax (Appeals) [CIT(A)] who came to the conclusion that it was not an item of deduction covered un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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