Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (8) TMI 716 - AT - Income TaxScope of revision proceedings initiated under section 263 - disallow the claim made under the head “Provision for redelivery of aircraft” - Held that:- It is the case of the revenue that the provision made by the assessee is required to be disallowed. If it is considered to be correct for a moment, then the reversal of the provision is not taxable. During the year under consideration, the total provision made is ₹ 7.08 crores and the amount reversed is ₹ 7.52 crores. Hence, disallowance of the provision amount of ₹ 7.08 crores and removal of the reversal amount of ₹ 7.52 crores offered by the assessee would result in removal of the net amount of ₹ 0.44 crore, in which case, there would be no prejudice caused to the revenue. Under this reasoning also, it cannot be held that the assessment order was prejudicial to the interest of the revenue. If the provision is allowed, then the actual expenditure equal to the amount of the provision, if it has not been debited to Profit and loss account should be allowable as deduction. Hence, on this count also it would result in tax neutral position. We notice that the learned Principal CIT has failed to properly appreciate the facts surrounding the issue from these angles, which demonstrates that no prejudice is caused to the revenue. We are unable to sustain the order passed by learned Principal CIT on this issue. - Decided in favour of assessee.
|