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2015 (7) TMI 910 - AT - Income TaxDisallowance of provision made for a loss on account of a firm purchase contract - Held that:- Prudence only implies that even though the amount cannot be determined with certainty, and represents only a best estimate in light of the available information, the same must be provided for. It nowhere advocates or prescribes providing for loss/liability that has not arisen during the relevant year or, in any case, by the end of the relevant year. Events after the balance-sheet date can only be taken into account in so far as they inform about the conditions prevailing during the relevant year, so as to enable a correct assessment of the operating results for the year and the state of affairs as at its close. There is nothing to show that the market price of the raw-material or the finished products had declined, much less to any substantial extent, up to 31.03.2003, the relevant year end.The assessee’s claim, in view of foregoing, is without merit. The decisions relied upon would be of little moment, even as clarified during hearing, in view of our specific finding of no loss having in fact arisen to the assessee during the year and, further, the principle of prudence as not being applicable to losses which arise or have their genesis in events subsequent to the end of the relevant year. Thus confirming the disallowance of the impugned loss. - Decided against assessee. Disallowance of the provision for various expenses - non supported by any evidences - Held that:- During the hearing, the ld. AR, the assessee’s counsel, conceded to the assessee having no further details/material to support its claim, relying on its written submissions before the authorities below, and towards which reference was made to pages 18 and 19 of the assessee’s paper-book. Under the circumstances, we have no hesitation in confirming the impugned disallowance. The question is of the basis on which it could be said or concluded that expenditure to that extent had in fact accrued, and which we find as wanting. The burden to prove its return, as well as claims preferred thereby, is only on the assessee, and which we find as not discharged to that extent. It may also be clarified here that the assessee had been extended sufficient opportunity to present its case. Needless to add, the assessee is a liberty to make a fresh claim for the subsequent year/s, even as it shall have to be shown by it that expenditure as claimed had arisen for those years, i.e., of payment, each year being independent. We may though clarify that we are not making any observation with regard to the deduction of the said expenditure for those years/s.- Decided against assessee. Computation of the deduction u/s. 80HHC - Held that:- The issue is squarely covered against the assessee by the decision of the Apex Court in the case of Ipca Laboratories Ltd. v. Dy. CIT [2004 (3) TMI 9 - SUPREME Court] - Decided against assessee. Computation of book profit u/s. 115JB - Held that:- The matter in our view stands squarely covered by the decision by the Apex Court in the case of CIT vs. Ajanta Pharma Ltd. [2010 (9) TMI 8 - SUPREME COURT]. We, accordingly, set-aside the matter back to the file of the AO for working the book profit u/s. 115JB in terms of the said decision. We decide accordingly. Addition qua unutilized MODVAT credit - Held that:- no infirmity in his direction for including the unutilized MODVAT credit and, thus, apply the condition of section 145A on all factors of production, i.e. opening stock, purchases, sales and closing stock. This also represents the consistent view of the tribunal, and for which we refer to the decision in the case of Hercules Pigment Industry vs. ITO [2013 (10) TMI 606 - ITAT MUMBAI], rendered considering all the relevant decisions, including in the case of Mahalakshmi Glass Works Pvt. Ltd. (2009 (4) TMI 182 - BOMBAY HIGH COURT ). We accordingly confirm the impugned order on this ground. Deletion of addition made on account of premium payable on premium notes (SPN) - Held that:- The matter was during hearing fairly conceded by the ld. DR to be covered against the Revenue by the order by the tribunal in the assessee’s own case for AY 1996-97 - Decided in favour of assessee.
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