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TMI Blog2023 (9) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue has failed to bring any material on record to demonstrate that the subsidy has actually gone to reduce the cost of any specified assets on which the assessee claimed depreciation. That being the factual position, no part of the subsidy can be reduced from the written down value to compute depreciation. Payment of service tax - whether provision of service tax is an allowable deduction? - AO disallowed the claim of the assessee on the ground that liability being contingent and dependent on the outcome of the verdict of the Hon ble Supreme Court on this issue - HELD THAT:- AO erred in treating the liability being contingent. It is undisputed fact that amount of liability is clear, since 50% of such liability was directed to be paid in three equal installments by the Hon ble Supreme Court and for balance 50%, surety was required to be furnished. Therefore, we do not see any good reason for interfering into well reasoned finding of the learned CIT(Appeals), same is hereby affirmed. Ground of appeal is dismissed. - Shri Kul Bharat, Judicial Member And Dr. B.R.R. Kumar, Accountant Member For the Assessee : Ms. Hasneeta Matta, Adv. For the Department : Sh. Praka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12.2016 at a total income of Rs. 35,89,83,352/-, by making additions relating to (i) treatment of entertainment tax-concession Rs. 8,43,52,253/-; (ii) excess claim of depreciation amounting to Rs. 6,58,41,746/-; and (iii) exceptional items debited to P L A/c. Rs. 10,48,55,322/-. Aggrieved against this the assessee preferred appeal before the learned CIT(Appeals) who allowed the appeal of the assessee in respect to - treatment of entertainment tax concession; depreciation; and service tax provision. The learned CIT(A), however, rejected the claim of assessee relating to issue relating to assessment completed on non-existing company. Aggrieved against the order of learned CIT(Appeals), the Revenue has preferred appeal challenging the deletion of additions made by the AO whereas the assessee has preferred cross-objection against CIT(A) s finding relating to assessment being completed on non-existing company. 5. We have heard learned representatives of the parties and perused the material available on record. 6. At the outset learned counsel for the assessee submitted that the issues involved in Revenue s appeal are squarely covered in favour of the assessee by earlier decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eby affirmed. Thus, ground no. 1 is treated as dismissed. Further, the Hon'ble Bombay High Court has also ruled in favour of the appellant in the case of CIT v/s. Chaphalkar Bros. 351 ITR 309 (Bom). In AY 10-11, AY 11-12 and A.Yr. 12-13 on identical issue, my Ld. Predecessor has decided the appeal in favour of the appellant. Respectfully following the decision of the jurisdictional ITAT and High Court and keeping in view principles of consistency, it is held that the receipt of Rs. 8,43,52,253/- in form of entertainment tax concession is capital in nature. In view of the above, the AO is directed to allow the entertainment tax concession as capital receipt. In the result, Ground No. 1 is allowed. 11. We find that the issue in question came up for adjudication before Coordinate Bench of this Tribunal in assessee s own case for earlier years wherein the Tribunal vide its common order dated 30.09.2022 in ITA nos. 3630/Del/2019, 3631/Del/2019 ITA 6317/Del/2017 (supra) has adjudicated the issue in favour of the assessee, inter alia, by observing as under: 7. We have heard the parties and perused the material available on record. 8. It is common point befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assessment order and material available on record. It is pertinent to mention that the Jurisdictional High Court in the case of Chapalkar Bros. (351 ITR 309)on the identical facts and the Hon ble Delhi ITAT in the case of PVR Ltd. ITA No. 1897/Del/2010 have decided the issue in favour of the appellant. The issue has also been decided by the Hon ble ITAT in favour of the appellant in its own case following decision in the case of Chapalkar Bros (Supra). Further, for AY 10-11, AY 11-12 and A.Yr, 12-13, this issue has been also decided in favour of the appellant by my Ld. Predecessor. Thus, respectfully following the decision of Jurisdictional High Court, Hon ble ITAT and keeping in view principles of consistency, the AO is directed to delete the disallowance of depreciation made by virtue of explanation 10 to Section 43(1). In the result, Ground No. 2 is allowed. 15. We find that this issue also came for adjudication before the Tribunal in assessee s own case for A.Y. 2010-11, 2011-12 and 2013-14 wherein vide common order dated 30.09.2022 (supra), the Tribunal has decided the issue in favour of the assessee, inter alia, observing as under: 11. The next commo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal and there being no change in facts and circumstance for the assessment year under consideration we see no reason to interfere in the order of learned CIT(A). Ground is rejected. 17. Apropos to ground no. 3, we find that the Ld. CIT(A) has adjudicated the issue relating to payment of service tax in favour of the assessee, inter alia, by observing as under: 8.3 I have carefully considered the facts of the case, oral contentions and written submission of the assessee, discussion of the AO in the assessment order and material available on record. It is the fact not disputed by the AO that the provision in respect of the service tax liability created by the Appellant was factually correct and was in accordance with its service tax liability which has arisen on the appellant because of the enactment of Finance Act, 2010 with effect from 01.06.2010. It is also the fact of the case that post such enactment, the matter was carried by various stakeholders to High Courts of Bombay, Gujarat, Karnataka, Orissa, Punjab and Haryana. In their decisions, the Hon ble High Courts have upheld the levy of service tax along with the validity of retrospective amendment. Accordingly, as far as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax has not been found to be justifiable. Further, it is not the case that the accounts of the assessee have not been prepared in accordance with the schedules of the Companies Act and therefore, there is no justification seen in making addition of this sum while working out the book profit u/s 115JB of the Act. This ground of appeal is accordingly allowed. 18. The short issue is whether provision of service tax is an allowable deduction. The objection of the AO in this regard is that such provision is not allowable under the Income-tax Act. He has categorically stated that the liability has not been crystallized. However, the learned CIT(A) has elaborately discussed this issue in the impugned order. In Note No. 27 to accounts, forming part of the Financial Statement, the assessee company has recorded that the Finance Act, 2010 has imposed a levy of service tax on renting of immovable properties given for commercial use, retrospectively with effect from June 1, 2007. Special Leave Petition filed before the Hon ble Supreme Court against the order of Delhi and other High Courts that had upheld the constitutional validity of amendment made to section 65(105)(zzzz) of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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