DEPUTY COMMISSIONER OF INCOME TAX , MUMBAI vs. SHIVALIK SOLID WASTE MANAGEMENT LTD, HIMACHAL PRADESH

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ITA 2744/MUM/2023Status: DisposedITAT Mumbai30 April 2024AY 2017-18Bench: SHRI NARENDER KUMAR CHOUDHRY (Judicial Member), SHRI RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER Deputy Commissioner of Income Tax, CC-6(3), 19th Floor, Air India Building, Nariman Point, Mumbai- 400021. PAN No. AAJCS7647D Vs. Shivalik Solid Waste Management Ltd. Village Majra, P.O., Dhabhota, Teh. Nalagarh, Solan- 174101, Himachal Pradesh- 174101. (Appellant) (Respondent) Assessee by : Shri Kirit Kamdar – CA Revenue by : Shri Prashant Mahajan – Sr. AR Date of hearing : 16.04.2024 Date of prono6 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that provisions for pit covering and post-closure expenses are allowable expenditures. They followed the decisions of various coordinate benches of the ITAT on similar issues.

What were the facts?

The Assessing Officer disallowed provisions for pit covering and post-closure expenses, arguing they were not ascertained liabilities. The assessee contended these were future expenditures to be met from current income. The CIT(A) deleted the disallowance, relying on previous year's orders.

What were the issues?

Whether provisions for future expenses like pit covering and post-closure are allowable as deductions under Section 37(1) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 37(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI

For Appellant: Shri Kirit Kamdar – CA
For Respondent: Shri Prashant Mahajan – Sr. AR
Hearing: 16.04.2024Pronounced: 30.04.2024

O R D E R

PER RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER:

This appeal has been filed by the Deputy Commissioner of Income Tax Central Circle– 6(3), Mumbai against the order of the Ld. CIT Appeal- 54 Mumbai and following grounds of appeal were raised: -

1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of Rs.2,11,13,042/- in respect of provision for Pit covering expenditure made in the assessment order despite the fact

2. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of Rs 2,80,32,480/- in respect of provision for Post closure expenditure made in the assessment order despite the fact that no such expenditure was incurred during the year and estimation is not ascertained liability?"

3. "Whether on the facts and in circumstances of the case and in law, the Ld. CIT(A) erred in allowing provision for pit covering expenses and provision for post closure expenses despite the fact that the assessee had not provided details of actual expenditure made in respect of provisions made during earlier years and hence could not establish basis of computation of provision?"

4. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance made by the Assessing Officer in the assessment order relying on the decision of his Ld. Predecessor vide order dated 05.05.2022 in the same case for A.Y 2015-16 & 2016- 17 despite the fact that Revenue had not accepted the decision of the Ld CIT(A) in the same case for A.Y 2015-16 & 2016-17 on merit but did not file appeal before Hon'ble' ITAT as the tax effect was lower than monetary limit as per CBDT Instruction No. 03/2018 dated 11.07.2018 and the case does not fall under exception clauses mentioned in Para 3 of the said circular and Para 10 of the Circular No. 3/2018

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