TMI Blog2020 (12) TMI 1277X X X X Extracts X X X X X X X X Extracts X X X X ..... rs 2005-06 to 2011-12 and ledger account extracts of the provisions for erection and commissioning, which evidences reversals as on the last day of financial year. However, the CIT(Appeals) has not taken note of the aforesaid material produced by the assessee. Tribunal has held that the assessee has failed to demonstrate either before the CIT (A) or before the tribunal that liability has accrued during the year and the fact that the substantial provision was reversed in subsequent years. The aforesaid finding is contrary to the material available on record. Therefore, in the facts of the case, the material produced by the assessee before the Commissioner of Income Tax (Appeals) as well as the tribunal needs factual adjudication - Remit t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the liability had not been estimated with reasonable accuracy? (iii) The tribunal committed an error in holding that the principles enunciated in the decisions of the Hon'ble Supreme Court in Bharat Earth Movers (245 ITR 42) and Calcutta Co. Ltd. (37 ITR 1) were not applicable to the present case? And (iv) The tribunal thus failed to appreciate that the method followed by the appellant as on a scientific basis, besides being fair and reasonable and that therefore the provisioned amount represented an accrued liability which was accordingly allowable as a deduction while computing its income chargeable to tax under the Act for the Assessment Year 2009- 10? 2. Facts leading to filing of this appeal briefly stated are that asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the income and not a claim for deduction per se. The Assessing Officer by an order dated 23.12.2011 inter alia disallowed the provision for erection and commissioning on the ground that the provisioning was done on an estimated basis and the assessee had failed to show that the expenditure was worked out scientifically on an actual basis. The assessee thereupon approached the Commissioner of Income Tax (Appeals) by filing an appeal. The Commissioner of Income Tax (Appeals) by an order dated 23.10.2013 upheld the disallowance in respect of the provision made by the assessee, however, other disallowances made by the Assessing Officer were deleted. The assessee as well as the revenue filed appeals before the Income Tax Appellate Tribunal (h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f provision is scientific and the assessee has been following the aforesaid method of provisioning consistently for nearly ten years and has a historical basis. 5. It is also pointed that before the Commissioner of Income Tax (Appeals) the assessee had produced a comparative statement showing the sales for which deduction is pending, the corresponding provisioning, the actual expenses incurred in the next years for financial years 200-06 to 2011-12 as well as ledger account extracts of the provision for erection and commissioning, which evidences reversals as on the last day of the financial year and therefore, the finding recorded by the tribunal that the assessee has failed to demonstrate that the liability had accrued during the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax (Appeals) or before the tribunal that liability has accrued during the year and the fact that the substantial provision was reversed in subsequent years. The aforesaid finding is contrary to the material available on record. Therefore, in the facts of the case, the material produced by the assessee before the Commissioner of Income Tax (Appeals) as well as the tribunal needs factual adjudication in the light of law laid down by Supreme Court. Therefore, we quash the order passed by the Commissioner of Income Tax (Appeals) as well as the tribunal insofar as it pertains to disallowance of the provision and remit the matter to the Commissioner of Income Tax (Appeals) to adjudicate the aforesaid issue afresh in the light of materials pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
