9911796707
TMI Blog2017 (12) TMI 1322X X X X Extracts X X X X X X X X Extracts X X X X ..... is on which the same has been disallowed by Ld. AO is that the same has been credited to the accounts of the respective parties in succeeding assessment years. However, in our opinion, if the liability had already been quantified and crystallized and provision thereof was made in the books of accounts, the same was allowable to the assessee irrespective of actual credit to the respective parties since the assessee, following mercantile system of accounting, was eligible to claim the same. The Ld. AR has placed elaborate documents in the paper book to demonstrate that the liability had actually crystallized during impugned AY. Therefore, without much deliberation, we restore the matter back to the file of Ld. AO to reappreciate the documenta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged company immediately before the demerger. Therefore, while deleting the impugned additions, we deem it proper to restore the matter back to the file of Ld. AO as directed to verify that the depreciation allowable to the demerged entity, in case demerger had not taken place and the actual depreciation claimed by the assessee under Income Tax Act remains the same. Resultantly, this ground of assessee’s appeal stands allowed for statistical purposes. - I.T.A. No. 1875/Mum/2015 - - - Dated:- 4-10-2017 - Shri D. T. Garasia, JM And Shri Manoj Kumar Aggarwal, AM Assessee by : S.Sriram, Ld. AR Revenue by : Saurabh Deshpande, Ld. DR ORDER Per Manoj Kumar Aggarwal (Accountant Member) 1. The captioned appeal by Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provision for incentive 97,37,699/- 3. Excess depreciation claimed 42,45,274/- TOTAL 1,40,51,863/- 2.3 From perusal of Profit Loss Account, it was noted that the assessee debited incentive expenses of ₹ 99,69,850/- out of which an amount of ₹ 99,39,699/- was shown as provisions. The Ld. AO noted that the said incentive was credited to the respective parties in the subsequent years and therefore allowable in subsequent years only and not in the impugned AY. 2.4 Further, Ld. AO noted that the assessee transferred ₹ 424.53 Lacs from Amalgamation Reserve to Genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificate is dated 11/06/2009, however, the same applies to whole financial year as evident from the annexure attached to the said certificate. In the alternative, it was contended that the impugned amount was much below threshold limit as provided u/s 194-I and therefore, even otherwise no tax deduction at source was required against the same. Qua addition against provision for incentives, Ld. AR drew our attention to the detailed documents placed at Page Nos. 52 to 101 of the paper book and contended that incentive was payable to the customers of the assessee against sales target achieved by them during impugned AY and the same had crystallized during impugned AY and allowable to assessee following mercantile system of accounting. The est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The only basis on which the same has been disallowed by Ld. AO is that the same has been credited to the accounts of the respective parties in succeeding assessment years. However, in our opinion, if the liability had already been quantified and crystallized and provision thereof was made in the books of accounts, the same was allowable to the assessee irrespective of actual credit to the respective parties since the assessee, following mercantile system of accounting, was eligible to claim the same. The Ld. AR has placed elaborate documents in the paper book to demonstrate that the liability had actually crystallized during impugned AY. Therefore, without much deliberation, we restore the matter back to the file of Ld. AO to reappreciate t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee company. All the assets and liabilities were taken over by the assessee at their book values as appearing in the books of transferor company, except minor adjustments so as to ensure uniformity in accounting policy and presentation of financial statements. The assessee has accounted the transaction on Pooling of Interest Method as envisaged in Accounting Standard-14 issued by ICAI. This method is followed in case of amalgamation in the nature of merger and according to this method, no adjustment is intended to be made in the book value of assets and liabilities taken over except to ensure uniformity of accounting policy. The Ld. AO has disallowed depreciation against the said amalgamation reserve at estimated rate of 10% and the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
