Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: TDS :: list of goods taxed at 4% :: TAX RATES - GOODS TAXABLE @ 4% :: articles on VAT and GST in India :: VAT RATES :: due date for vat payment :: ACCOUNTING STANDARD :: Central Excise rule to resale the machines to a new company :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: empanelment :: ACCOUNTING STANDARDS :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt
 
 
From the Courts »
 Ravneet Takhar Vs. Commissioner Of Income Tax Ix And Ors.
 Jaiprakash Associates Ltd. Vs. Commissioner Of Income Tax
 Formula One World Championship Limited Vs. Commissioner Of Income Tax, International Taxation-3 And Anr.
 Commissioner Of Income Tax International Taxation-3 Delhi Vs. Formula One World Championship Ltd. And Anr.
 Reliance Communications Ltd vs. DDIT (ITAT Mumbai)
  Sushila Devi vs. CIT (Delhi High Court)
 Ashok Prapann Sharma vs. CIT (Supreme Court)a
  Vatsala Shenoy vs. JCIT (Supreme Court)
  Vatsala Shenoy vs. JCIT (Supreme Court)
 M.K.Overseas Pvt. Ltd. Vs. Pr.Commissioner Of Income Tax-06
 Arshia Ahmed Qureshi Vs. Pr. Commissioner Of Income Tax-21

COMMISSIONER OF INCOME TAX-I Vs. AIRLINE ALLIED SERVICES LTD.
August, 16th 2013
$~7.
*       IN THE HIGH COURT OF DELHI AT NEW DELHI
+                 INCOME TAX APPEAL NO. 13/2013
                                     Date of decision: 8th August, 2013


        COMMISSIONER OF INCOME TAX-I
                                                         ..... Appellant
                      Through Mr. Sanjeev Rajpal, Sr. Standing
                      Counsel.
                      versus
        AIRLINE ALLIED SERVICES LTD.
                                                  ..... Respondent
                           Through Mr. P.K. Sahu & Mr. Prashant
                           Shukla, Advocates.
        CORAM:
        HON'BLE MR. JUSTICE SANJIV KHANNA
        HON'BLE MR. JUSTICE SANJEEV SACHDEVA

SANJIV KHANNA, J. (ORAL):

        This appeal by the Revenue pertains to Assessment Year 2003-

04 and arises out of order passed by the Income Tax Appellate

Tribunal dated 15th June, 2012.

2.      Revenue in this appeal has only raised two issues. First issue

relates to deletion of addition of Rs.27,71,00,000/- made by the

Assessing Officer, by Commissioner of Income Tax (Appeals), which

have been affirmed by the tribunal. The Assessing Officer had noticed

that grant of Rs.35 crores was sanctioned by the Government in the

said year to improve air connectivity in North-Eastern Region. The

respondent-assessee had taken on lease four ATR-42-320 aircrafts for

ITA No. 13/2013                                               Page 1 of 5
five years from Ms/ Aviande Transport Regional (ATR).

3.      The respondent-assessee had authorised and had spread this

grant over 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 erroneous.

The grant was in terms of the Memorandum of Understanding and as

per the terms of the grant the respondent-assessee was to provide 4177

seats per week.      This payment of Rs.35 crores was made for

operational expenses of four leased aircrafts for 60 months. It was held

that the respondent had obtained concessions under the scheme and the

progress of the scheme had to be intimated to North-Eastern Council.

As the respondent was utilising the said grant over a period of five

years, they had followed AS-12 accounting standards. CIT(Appeals)

and the tribunal have held that the said standard recognises that while

ITA No. 13/2013                                                  Page 2 of 5
computing profit and gains, the account should be prepared on

systematic and rational basis so as to match the receipt or the grant,

with the related cost. AS-12 was in accordance with Section 145 of the

Income Tax Act, 1961 and Section 211 of the Companies Act, 1956.

CIT (Appeals) and the tribunal have referred to the aforesaid admitted

factual matrix and the applicable and relied upon accounting standard,

which were prescribed by the Institute of Chartered Accountants. It

was held that the accounts of the respondent should give true and fair

view of the profit and loss account. Reference has been made to

judgments of the Supreme Court in CIT versus Woodward Governor

India Private Limited, (2009) 312 ITR 254 (SC), CIT versus Bilahari

Investments (P) Limited, (2008) 299 ITR 1 (SC) and J.K. Industries

Limited & Another versus Union of India & Others, (2007) 312 CTR

(SC) 301.

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

ITA No. 13/2013                                                  Page 3 of 5
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 state, how and why the reasoning can be faulted as the

assessee had followed AS-12. Revenue has not disputed before us that

the accounting standard, as prescribed by the institute, has been

followed. On the first question, therefore, no substantial question of

law arises.

6.      The second question relates to addition of Rs.534.79 lacs, which

was made by the Assessing Officer but again deleted by the first

appellate authority and upheld by the tribunal in the impugned order.

The Assessing Officer has recorded that 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. The assessee in the reply had

stated that the basic records were maintained by the Indian Airlines as

per procedure and the reconciliation of the same was done at much

later date. On the question of reconciliation, we may state that the

tribunal has sustained addition of Rs.34.31 lacs. 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




ITA No. 13/2013                                                Page 4 of 5
inventories were maintained by Indian Airlines and the figures given

by them have been taken in the books. The Auditor had hedged his

report and had stated that they could not ascertain inventories of

Rs.534.79 lacs in view of the said factual position, i.e., they had taken

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 consideration.

        The appeal is dismissed.


                                       SANJIV KHANNA, J.



                                       SANJEEV SACHDEVA, J.
        AUGUST 08, 2013
        VKR


ITA No. 13/2013                                                 Page 5 of 5
 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
E-catalogue online catalogue E-brochure online brochure online product catalogue online product catalogue e-catalogue Indi

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions