DCIT, Circle 1 (1) vs. Aria Hotels and Consultancy Services Pvt. Ltd.

Parties Involved

Facts Summary

The assessee, Aria Hotels and Consultancy Services Pvt. Ltd., filed its return of income for the Assessment Year 2016-17 on 13.10.2016, declaring a loss of Rs.93,05,67,081/-. The case was selected for scrutiny, and the assessment under section 143(3) was completed on 17.12.2018 at the returned loss. The Assessing Officer observed that the assessee had debited an amount of Rs.21,11,32,130/- as duty saved against export obligation, which is a liability of contingent nature, from the profit & loss account. The Assessing Officer issued a notice to the assessee to explain the transactions, and since no response was received, the Assessing Officer made the addition. The assessee appealed to the Commissioner of Income Tax (Appeals), who dismissed the appeal. The Revenue then filed an appeal before the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the contingent liability of Duty Saved Against Export Obligation should be added to the income of the assessee.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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