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2014 (5) TMI 439 - GUJARAT HIGH COURTDeletion of addition u/s 41(1) of the Act - Whether claim of deduction by excess provision written back amounts to double deduction – Held that:- Assessee NDDB was enjoying exemption from payment of income tax till A.Y 2002-03 - During the previous year relevant to A.Y 2007-08, the assessee wrote back certain provisions made in the earlier years - The provisions were made during the period when NDDB was enjoying the tax exemption. What is primarily required is that there is allowance or deduction made by the assessee in respect of loss, expenditure or trading liability incurred by the assessee - as held by the CIT (A) as well as the Tribunal, what the assessee did was only make a provision for a possible expenditure or liability - It was thus neither an allowance nor deduction - not for any loss, expenditure or trading liability incurred by the assessee - the Tribunal correctly held that Section 41 (1) of the Act would not apply - CIT (A) has permitted the AO to re-verify whether any deduction towards such provision was allowed in the AY 2003-04 to 2007-08 - if any amount of such provision is found allowed, for the years to that extent, the provision on written back is to be taxed u/s 41 (1) of the Act – Decided against Revenue.
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