9911796707
TMI Blog2017 (12) TMI 1857X X X X Extracts X X X X X X X X Extracts X X X X ..... ia that :- "1. The Ld. CIT (A) has erred in law and on facts in deleting addition of Rs.3,49,38,968/- made by the AO on account of disallowance of provision for obsolescence of spares. 2. The appellant craves leave for reserving the right to amend, modify, alter, add, or forego any ground (s) of appeal at any time before or during the hearing of this appeal." 4. Briefly stated the facts necessary for adjudication of the controversy at hand are : originally, assessment of the assessee company was completed under section 143 (3) of the Income-tax Act, 1961 (for short 'the Act') at the returned declared loss of (-) Rs.50,33,30,128/-. However, AO after recording reasons initiated the proceedings u/s 147 of the Act after issuance of the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the sole question arises for determined in this case is :- "as to whether addition of Rs.3,49,38,968/- made by the AO on account of disallowance of the provision for obsolescence of spares not being actual expenditure during the year deleted by the CIT (A) is sustainable addition?" 9. Ld. DR for the Revenue relying on the assessment order contended that the ld. CIT (A) has erred in deleting the addition made by the AO on account of the provision for obsolescence of spares. 10. On the other hand, ld. AR for the assessee company to repel the arguments addressed by the ld. DR for the Revenue contended that the issue in controversy has been squarely covered in its favour by the order passed by the coordinate Bench of the Tribunal in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nautic industries. The department authorities should have appreciated the nature of the assessee's business and the character of its claim based on applicable accounting standard before rejecting the same. It is not an adhoc claim for deduction in respect of a contingent liability. The claim is in respect of the normal wear and tear which is acceptable in the aeronautic industries and such claim is bade on the provisions of Schedule XIV of the Companies Act, 1056 while dealing with the rate of depreciation. The 5.6% is the rate of depreciation prescribed under the Companies Act for providing depreciation for the purposes of section 2-5 and 350 of the same Act. In fact, the rate of depreciation prescribed under the Income-Tax Act is @ 40% wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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