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2017 (6) TMI 1146 - AT - Income TaxTake closing WDV of the assets in the preceding year as the opening of WDV in the present year - Held that:- Respectfully following the decision of Co-ordinate Bench for Asst. Year 2007-08 we are of the considered opinion that this is settled position of law that the closing WDV of the preceding year has to be adopted as opening WDV of the present year and we direct the Assessing Officer to pass necessary order in the light of above discussion after providing reasonable opportunity of being heard to the assessee. Levy of interest under section 234B - Held that:- Interest u/s 234B/234C would not have been charged on the assessee on the increase in total income resulting from retrospective amendment to section 43(6) of the Act. Accordingly, this ground of assessee is allowed. Addition u/s 41 - Held that:- For application of such Section 41 (1) of the Act, therefore, 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. In the present case, 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, in any case, not for any loss, expenditure or trading liability incurred by the assessee. In that view of the matter, the Tribunal correctly held that Section 41 (1) of the Act would not apply. Further, we have noticed that CIT (A) has permitted the Assessing Officer to re-verify whether any deduction towards such provision was allowed in the assessment years 2003-04 to 2007-08. He further provided that if any amount of such provision is found allowed, for the said years to that extent, the provision on written back is to be taxed under Section 41 (1) of the Act. This has also been confirmed by the Tribunal. This is one more ground to convince us not to interfere. No reason to interfere with the order of ld. CIT(A) deleting the addition made u/s 41(1) of the Act towards provisions written back. Accordingly, this ground of Revenue is dismissed.
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