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2016 (2) TMI 572 - HC - Income TaxAddition u/s 41 - cessation or remission of liability - Held that:- There are concurrent findings of fact that the lease for the air crafts has been extended for further period and liability of expenses at the time of redelivery of the aircrafts has not ceased. Thus, the same would have to be provided for, as it is likely to be incurred when the lease expires and said four air crafts are redelivered. Section 41(1) of the Act has application only when there is cessation and/or remission of liability incurred (which has been duly paid and/or provided for) in the subsequent years, consequent of which some benefit in cash or in any other manner were obtained by the party whose liability has ceased. In this case, in fact, there is no cessation or remission of liability nor any benefit obtained by the Respondent-Assessee for the purposes of Section 41(1) of the Act to be invocable. Written back of excess provision made in earlier years - AO held it to be a part of prior period income - Held that:- The Tribunal, on examination of the order of the CIT(Appeals) upheld the same as the amount of ₹ 68.50 lacs was erroneously shown as prior period income and had rectified the same subsequently. We find that both the CIT(Appeals) as well as the Tribunal have arrived at concurrent findings of fact. The Revenue has not been able to show that the same is in any way perverse and/or arbitrary. Disallowance of business expenditure - Held that:- We find that the CIT(Appeals) as well as the Tribunal have arrived at findings of fact that the expenses of ₹ 11,65,950/- were incurred for the purposes of Respondent's business. The concurrent finding of fact has not been shown to be in any way perverse and/or arbitrary to give rise to any substantial question of law Additional expenditure relating to aircrafts taken on finance lease - Held that:- It is not disputed before us that the revised return of income was a valid return. In that view of the matter, the Assessing Officer was not justified in not considering the claim only on the ground that the claim of ₹ 25.22 crores for expenditure was made only in the revised return of income. It is not disputed before us that the expenditure as claimed is eligible for deduction under Section 37(1) of the Act as it has been expended exclusively for the business of the Respondent-Assessee.
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