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TMI Blog2022 (5) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... ny merit in the ground of Revenue s appeal. Thus, Ground No.2 raised by the Revenue is dismissed. Disallowance of non business expenses - HELD THAT:- The disallowance was purely made on adhoc basis. The AO has merely stated that the assessee could not justify the business expediency. We are unable to understand that how the AO was convinced in respect of 95% of expenses being incurred as per the business expediency and with regard to 5%, the assessee could not prove business expediency. This approach of the AO is not inconsonance with the settled principle of law. We therefore, do not see any reason to interfere in the finding of Ld.CIT(A), the same is hereby confirmed. Ground No.3 raised by the Revenue is therefore, dismissed. Addition to the total income on account of deferred grant - assessee submitted that Ld.CIT(A) failed to appreciate the fact that the assessee himself had offered this income in the Assessment Year 2016-17. Therefore, this amount cannot be allowed to be taxed twice - HELD THAT:- It is the say of the assessee that grant was given with specific direction by the grantor to be utilized for capital infrastructure. Since the amount could not be utilized d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considering the submissions and material placed on record, sustained the addition qua deferred grant and rest of the two additions were deleted. 4. Aggrieved against this, both the Revenue and the assessee challenged the impugned order by way of appeal and cross-objection respectively. 5. First, we take up Revenue s appeal in ITA No.1110/Del/2018 pertaining to Assessment Year 2012-13 wherein the Revenue has raised following grounds of appeal:- 1. Whether on the facts and circumstances of the case, Id. CIT(A) is justified in deleting the addition made of Rs. 3,96,41,576/ - made on account of provision for inventory obsolescence despite the failure on the part of the assessee to furnish necessary details and documentary evidences before AO? 2. Whether on the facts and circumstances of the case, Id. C1T(A) has not erred is admitting the additional evidences without affording an opportunity to AO to examine then? 3. Whether on the facts and circumstances of the case, Id. CIT(A) has not erred in deleting the disallowance of Rs. 9,45,712/- being 5% of the Repair Maintenance Building Others without appreciating that the said expenses were not fully supported with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tio laid down by the binding precedents. Hon ble Delhi High Court in the case of CIT, New Delhi vs Hotline Teletube Components Ltd.(supra) has held as under:- 5. In the instant case we find that the principle for valuing stock at cost or realizable market price whichever is lower is applicable. The assessee has demonstrated that the stock being obsolete did not move for over three years and also the fact that it could only be sold if at all as scrap. As a matter of fact, the assessee also established that in the event it is sold as scrap the burden of excise duty would be much more than what it could realize on sale of the said stock as scrap. The Tribunal has returned this as a finding of fact. In view of these findings, it is quite clear that, all that the assessee has done by making the provision for diminution in value of stock is to anticipate the loss in the value of stock. 11. Further, the Hon ble Karnataka High Court in the case of CIT, Banglore vs IBM India Ltd.(supra) has held as under:- 7. The said provision is created essentially in a situation, where the market value of the stock and spares in hand as on the last date of the financial year, is lower th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stions of law are answered in favour of the assessee and against the revenue. No merit. The appeal is dismissed. 12. In the light of the above binding precedents, we do not see any reason to interfere in the finding of Ld.CIT(A), the same is hereby affirmed. Thus, Ground No.1 raised by the Revenue is dismissed. 13. Now, coming to Ground No.2 raised by the Revenue is against the admitting the additional evidences without affording an opportunity to AO. 14. At the outset, Ld. Counsel for the assessee submitted that no additional evidences were filed before Ld.CIT(A). Therefore, there was no reason to call for Remand Report from the AO. 15. Ld.Sr.DR supported the orders of the authorities below. 16. We have heard the rival contentions and perused the material available on record and gone through the orders of the authorities below. We find that Ld. Sr. DR could not point out that what were the additional evidences filed before Ld.CIT(A) which was not confronted to the AO. Therefore, in the absence of specific averment regarding additional evidences, we do not see any merit in the ground of Revenue s appeal. Thus, Ground No.2 raised by the Revenue is dismissed. 17. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be allowed to be taxed twice. 27. Ld. Counsel for the assessee reiterated the submissions as made before Ld. CIT(A). He submitted that the grantor remit the money to the assessee with a direction that such moneys was required to be spent only for specified purposes and any amount remaining unspent/unutilized shall be held by the assessee in trust for and on behalf of the grantor. He further submitted that since the assessee had not any right over the unutilized amount of grant, the grant received in advance and remaining unutilized during the previous year cannot be taxed as a revenue receipt. He further submitted that without prejudice to above, the grant was received by the assessee for capital purposes. Since the grant was received for capital purposes and was utilized as such by debiting the capital expenditure to current liability during the relevant Assessment Year 2012-13, and unutilized part of its at the end of the year cannot be treated as revenue in nature. He further submitted that no addition on this account had been made in the Assessment Year 2013-14. Moreover, the balance amount of grant of Rs.2,42,47,860/- has been written back by the assessee to income d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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