TMI Blog2013 (9) TMI 964X X X X Extracts X X X X X X X X Extracts X X X X ..... disputed that the accounting standard, as prescribed by the institute, has been followed – Decided against the Revenue. Addition on the basis of auditors report - Addition of Rs.534.79 lacs - In the notes of the Auditor, they had qualified the accounts stating that details of inventories of Rs.534.79 lacs could not be ascertained – Held that:- On the question of inventories of Rs.534.79 lacs, the CIT (Appeals) has recorded that this amount was duly reflected in the Annual Report. He has made reference to Schedule IV of the Annual Report where under the head ‘inventories’ full details had been given. It is pointed out that the inventories were maintained by Indian Airlines and the figures given by them have been taken in the books. The Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a period of five years as the lease period of the aircrafts was sixty months. The Assessing Officer disagreed and held that once the respondent-assessee had received the grant of Rs.35 crores from the Ministry of Finance and Company Affairs, the same could not have been spread over five years, i.e., the lease period, and the entire amount should be brought to tax in one year, i.e., year of receipt itself. The assessee was following mercantile system of accounting and the grant had accrued to the respondent-assessee in the period relevant to the present assessment year. Thus, addition of Rs.27.71 crores was made. 4. CIT(Appeals) and the tribunal have observed that the Assessing Officer had committed a mistake and his reasoning was erroneo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01. 5. The findings recorded by the two appellate authorities is that the standard followed by the respondent was as per accounting standard AS-12 prescribed by the Institute of Chartered Accountants. The said method of accounting cannot be faulted or ignored. It is further recorded that there was no dispute that the grant given to the respondent was based upon operations from which net profit/income had to be arrived at after deducting the expenditure. The grant had to be utilised over five years. They accordingly accepted that amount of Rs.7.29 crores declared by the respondent, out of grant of Rs.35 crores should be treated as income of the year in question. Before us, the counsel for the Revenue has not been able to point out and stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken the figures given by Indian Airlines and had not examined the accounts/books of Indian Airlines. 7. During the course of the first appellate proceedings, in view of the response/contention of the appellant, a remand report from the Assessing Officer was called for. The Assessing Officer did not submit the remand report to contest the contention of the respondent-assessee. CIT (Appeals) accordingly recorded that amount of Rs.534.79 lacs was not in dispute. The respondent-assessee succeeded. Before tribunal also, the Revenue could not contest the said position as has been recorded in paragraph 10 of the impugned order passed by the tribunal. Therefore, even on the second issue, we do not find any substantial question of law arises for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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