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2017 (8) TMI 369 - AT - Income TaxAddition on account of slow moving, non-moving and obsolete stores written off - Held that:- We find that the issue in dispute is squarely covered by the decision of Hon’ble Jurisdictional High Court in the assessee’s own case Once the engineering expert examined all the heads of stock valued them, to the best of his judgment, and in the absence of any finding that the 5% was not relatable to such valuation without an alternative valuation or that it is a flawed method of valuation, the AO could not have rejected what was offered as the reduced value of the Slow- Moving Stock. There is nothing on the record to doubt the bonafides of the valuation. In the event of likelihood of the stocks realizing a higher amount than the value shown, the same would be reflected in the subsequent year in the income or profit of the assessee, the Revenue’s contention is without any merit. Addition on account of defined contribution to Pension Scheme - Held that:- We find that the issue in dispute is squarely covered by the decision of Hon’ble Jurisdictional High Court in the assessee’s own case held that making of a provision to meet a contingent liability need not be in order to meet such liability entirely in the year of its creation. The provision having been made on the basis of an actuarial report, which is not shown by the Revenue to be unacceptable on the ground that it is not based on known accounting of financial principles, the mere fact that the actual pay out in a particular AY may be far less than the provision cannot provide a justification to deny the deduction. The Court concurs with the view of the CIT(A) and ITAT that the provisions does not attract Section 43B of the Act. The concurrent finding of the CIT(A) and the ITAT on the above issue does not give rise to any substantial question of law. Interest accrued on advance given to M/s. Karsan - Held that:- We find that the issue in dispute is squarely covered by the decision of Hon’ble Jurisdictional High Court in the assessee’s own case as held there is no dispute that the ICA has awarded interest to the assessee @5% p.a. on the advance made to M/s. Karsan. It is also not disputed that the assessee could not make recovery against the advance (principal amount) of ₹ 130.69 crores, an amount of ₹ 1.05 crores only could be recovered leaving balance advance of ₹ 129.64 crores which could not be recovered till date. The notational interest awarded by the International Court of Arbitration, which has now attained finality is a hypothetical income which cannot be subjected to tax. Merely because the saie amount has been awarded by way of an order, does not mean that the assessee has received such income. The assessee followed mercantile system of accounting where there cannot be a situation of hypothetical income being taxed. Appeal of the Revenue is dismissed.
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