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2013 (9) TMI 964 - DELHI HIGH COURTTaxability of government grants – Accounting Standard (AS) - 22 - Held that:- There was no dispute that the grant given to the respondent was based upon operations from which net profit/income had to be arrived at after deducting the expenditure - The grant had to be utilised over five years – Hon’ble Tribunal, accordingly accepted that amount of Rs.7.29 crores declared by the respondent, out of grant of Rs.35 crores should be treated as income of the year in question - Counsel for the Revenue has not been able to point out and state, how and why the reasoning can be faulted as the assessee had followed AS-12 - Revenue has not disputed that the accounting standard, as prescribed by the institute, has been followed – Decided against the Revenue. Addition on the basis of auditors report - Addition of Rs.534.79 lacs - In the notes of the Auditor, they had qualified the accounts stating that details of inventories of Rs.534.79 lacs could not be ascertained – Held that:- On the question of inventories of Rs.534.79 lacs, the CIT (Appeals) has recorded that this amount was duly reflected in the Annual Report. He has made reference to Schedule IV of the Annual Report where under the head ‘inventories’ full details had been given. It is pointed out that the inventories were maintained by Indian Airlines and the figures given by them have been taken in the books. The Auditor had hedged his report and had stated that they could not ascertain inventories of Rs.534.79 lacs in view of the said factual position, i.e., they had taken the figures given by Indian Airlines and had not examined the accounts/books of Indian Airlines. A remand report from the Assessing Officer was called for. The Assessing Officer did not submit the remand report to contest the contention of the respondent-assessee – Decided against the Revenue.
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