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2017 (12) TMI 1857 - AT - Income TaxDisallowance of provision for obsolescence of spares - reliance on audit objection - addition made as not actual expenditure incurred by the assessee company; and two that this liability was unascertainable in the hands of the assessee company - CIT-A deleted the addition - HELD THAT:- The coordinate Bench of the Tribunal in M/s. Jet Airways (I) Ltd. [2010 (10) TMI 1243 - ITAT MUMBAI] while dealing with identical issue has held that the provision for obsolescence of spares is not an ad hoc claim for deduction rather it is a claim in respect of normal wear and tear acceptable in the aeronautic industry and as such, claim is based on provision of Schedule XIV of the Companies Act, 1956 which deals with the rate of depreciation. CIT (A) vide impugned order has thrashed the issue at length to reach at the conclusion that the provision for obsolescence of spares is not an ad hoc provision but on the basis of actual uses of aircraft on hourly basis and maintenance is due after the prescribed hours of uses. It is ascertained liability which is charged as per airline industry practice and standard norms. CIT (A) has rightly deleted an addition made by the AO on account of the provision for obsolescence of spares, being genuine expenditure to run the airline business. So, finding no illegality or perversity in the impugned order, present appeal filed by the Revenue is hereby dismissed.
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