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2022 (6) TMI 949 - AT - Income TaxRecognition of income - scope of AS -9 - addition being the amount already realized and shown as income in the FY 2013-14 as per arbitration award - HELD THAT:- As noted that it is not the case that the assessee had made a fair, honest estimate of it”s loss, so that it is only the difference, plus or minus, that would require to be claimed set-off of or offered as income on award of compensation. That is, the assessee invokes AS-9 without following the accounting precepts, making a reasonable accounting estimate in the light of the facts of the case and the law in the matter. The matter thus reduces to one of reasonableness subject to the terms of the agreement, being the guiding criteria. It is only where so that it can be said that, applying AS-9, any amount beyond this sum cannot, despite its claim, be regarded as arisen to the assessee, being uncertain as to its realisation, de hors which it becomes a bald claim. We have on facts found that to be the grievance or cause of objection of the buyer-company. Though it may appear that the decision by the first appellate authority, which stands confirmed by us, has been due to the availability of the award, it is not so. The award only provides a ready figure of a reasonable compensation and, thus, adopted as a surrogate measure therefor, which would otherwise need to be worked out, and toward which we have suggested a formula based on PSA itself. The loss awarded by the Commission is on 109.74 MU (million units), which were agreed to be sold at Rs. 5/5.50 per unit. The profit (loss) as per the P&L A/c, assuming the sale of excess power at that rate, as against that obtaining, would easily yield the extent of the loss suffered by the assessee, which, where in excess of Rs. 2 per kwh (Rs. 21.89 cr.), is to be capped at that sum. The assessee made an exorbitant claim, which led to its non-acceptance. It is for this reason that we have found the facts of the case and, therefore, the issue at hand, as squarely covered by Chunilal V. Mehta & Sons P. Ltd. (1971 (8) TMI 4 - SUPREME COURT] with reference to which, as indeed the order of MPERC read with PSA, the parties were required to address their arguments during hearing, though choose to do so de hors the same. There is no mention of the nature and extent of the dispute in FGP Ltd. [2008 (6) TMI 343 - BOMBAY HIGH COURT] in which case the Hon'ble Court did not have the benefit of the arbitral award, available in the instant case even before the AO. The matter of accrual, pertain as it does to the accrual of a right to income, is necessarily to be defined in terms of money value, de hors which it carries no meaning. It is for example nobody”s case that there is no accrual of a right to the assessee to any sum on the non-scheduling of agreed power by LANCO, and which, to the extent it does, is only for the current year. We, accordingly, find no reason for any interference with the order of the ld. CIT(A), who has, following Chunilal V. Mehta & Sons P. Ltd. [1971 (8) TMI 4 - SUPREME COURT] unfortunately not relied upon by either party before us, held the accrual of income only at Rs. 14.06 cr. and, further, for AY 2011-12. We decide accordingly. Provision for terminal benefits to it's employees disallowed for want of production of payment vouchers - suo moto disallowance made by assessee - HELD THAT:- We know, some part of the balance provision for the current year, i.e., Rs. 20.60 lacs (Rs.130.89 lacs – Rs. 110.29 lacs) may have been paid by the due date of filing of the return for current year u/s. 139(1), in which case the same also qualifies for deduction u/s. 37(1) r/w s. 43B. The order of the ld. CIT(A), who has allowed the assessee a relief of Rs. 21.47 lacs is, thus, on the face of it, incorrect. He, in doing so, allows the assessee credit for Rs. 130 lacs paid on 31/03/2011, even as he specifically notes that the assessee did not file any confirmation for payment of Rs.130 cr. from the M.P. Terminal Benefit Trust during appellate proceedings. Rather, his order is wholly inconsistent with and without regard to that by the AO, the basis of disallowance by whom is the non-production of payment vouchers by the assessee before him, which finding or infirmity therefore survives the impugned order. Suo motu disallowance by the assessee - As the payment/s made against each provision, as also if the same is to an approved fund. It is only when armed with this information, which he is at liberty to verify, that the AO could allow the assessee’s claim in respect of payment of Rs. 240.29 lacs (Rs. 130 cr. + Rs. 110.29 cr.) made during the current year, as indeed that qua the current year provision made in the following year, i.e., up to the due date of filing the return of income u/s. 139(1). And which we, vacating the finding/s by the ld. CIT(A), subject to his satisfaction, direct the AO to and, further, to record his dissatisfaction, if any, per a speaking order, to the extent the said deduction is not allowed by him. Assessee’s appeal is partly allowed
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