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2018 (4) TMI 1724 - AT - Income TaxAddition being provision of inventory written off - CIT(A) held that the assessee duly followed AS-2 on valuation inventory and valued the stores on the basis of cost or net realisable value, whichever is lower - HELD THAT:- It is found that the assessee had taken three ATP Air Crafts in FY 2005-06 and it grounded the Air Craft Operation in the FY 2007-08. However, some spares remained unused and kept in the stock. The opening value of the stock as on 01.04.2010 was ₹ 1,13,33,793/- and during the year the assessee had made efforts to dispose off the stocks and in response received quotation from third party of USD 100,000 (₹ 49,50,000/-). Based on AS-2, the assessee has valued the stores on the basis of cost or net realisable value, whichever is lower. Therefore, the assessee has written down the value of stocks to ₹ 49,50,000/-. We find that the assessee has to value inventory as per AS-2 and on that basis it has valued the cost of spare parts which has become obsolete and non-moving. Addition as employee’s contribution to PF and ESIC - amount as paid after due date of payment and was not allowable as per section 36(1)(va) r.w.s. 2 (24)(x) - HELD THAT:- CIT(A) in assessee’s own case for AY 2010-11 had allowed the deduction of delay in payment of Employees’ contribution to ESIC and PF. The Revenue filed appeal before the ITAT against the said order of the Ld. CIT(A). The Tribunal upheld the order of the Ld. CIT(A), following the decision in CIT v. M/s Alom Etrusions Ltd. [2009 (11) TMI 27 - SUPREME COURT] and CIT v. M/s Hindustan Organics Chemicals Ltd [2014 (7) TMI 477 - BOMBAY HIGH COURT] - Facts being identical, we follow the said order of the Co-ordinate Bench in assessee’s own case for the AY 2011-12 and uphold the order of the Ld. CIT(A). Unrealized foreign exchange loss disallowed being loss due to foreign exchange fluctuation - Treating provision for earlier termination of lease in the same ground along the line of unrealized Foreign Loss - HELD THAT:- As decided in own case [2016 (8) TMI 1443 - ITAT MUMBAI] entire amount has already been paid by the assessee to the Lessor and in this respect a compromise was entered into between the parties before the Indian Court and the entire decree passed by the UK Court was satisfied. It is important to mention here that it was the decree of the Queen’s Bench Division of the High Court of Justice, UK which was fully satisfied from which it can be gathered that the liability of the assessee was crystallized in view of the order dated 14-05-2010 of the High Court of Justice, UK which was ultimately satisfied by the assessee by making payment to the lessor. Therefore, once the liability for making payment was crystallized by the High Court Order, then question of contingent liability does not arise. Therefore, both the AO and the learned CIT (A) was wrong in treating the liability as contingent liability of the assessee MAT Computation - adjustment made u/s 115JB - HELD THAT:- Adjustments were made by the AO without any discussion in the assessment order. In Apollo Tyres Ltd. [2002 (5) TMI 5 - SUPREME COURT] it has been held that where the profit and loss account has been prepared in accordance with Part II and III of Schedule VI to the Companies Act and which has been scrutinized and certified by the statutory auditor and relevant authorities, the Assessing Officer has no power to scrutinize net profit in profit and loss account except to the extent provided in Explanation to 115J. Revenue appeal dismissed.
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