Ita/356/2015 Of Pr. Commissioner Of Income Tax Faridabad v. M/S Nhpc Ltd

I N THE HI GH COURT OF PUNJAB AND HARYANA AT CHANDI GARHI ncome Tax Appeal No. 356 of 2015 ( O&M)DATE OF DECI SI ON: 21. 03. 2018 Pr i nci pal Commi ssi oner of I ncome Tax, Far i dabad…. . Appel l ant ver sus M/ s NHPC Li mi t ed . . . . . Respondent CORAM: - HON’ BLE MR. JUSTI CE S. J. VAZI FDAR, CHI EF JUSTI CE HON’ BLE MR. JUSTI CE AVNEESH JHI NGAN Pr esent :Mr . Taj ender K. Joshi , Advocat e f or t he appel l antMr . Ved Jai n, Advocat e f or t he r espondent. .Mr . Ved Jai n, Advocat e f or t he r espondent. . S. J. VAZI FDAR, CHI EF JUSTI CE: Thi s i s an appeal agai nst t he or der of t he I ncomeTax Appel l at e Tr i bunal uphol di ng t he or der of t he Commi ssi onerof I ncome Tax ( Appeal s) . The appeal per t ai ns t o t he AssessmentYear 2006- 07. 2.The appel l ant cont ends t hat t he f ol l owi ng subst ant i al quest i ons of l aw ar i se i n t he appeal : - “ 1.Whet her , on t he f act s and i n ci r cumst ances oft he case and i n l aw, t heHon’ bl e I TAT wasr i ght i n l aw i n di smi ssi ng appeal of t heRevenue obser vi ng t hat ‘ i n vi ew of cat egor i calf i ndi ng of t he Supr eme Cour t we hol d t hat t heCI T( A) was cor r ect i n hol di ng t hat advanceagai nst depr eci at i on cannot be added under t hecomput at i on oft he nor mal i ncome’ , wher eas t heHon’ bl e Supr eme Cour t i n i t s deci si on dat ed05. 01. 2010 has hel d t hat t he ‘ advance agai nstdepr eci at i on’ i s ‘ i ncome r ecei ved i n advance’ ,t hus maki ng t he sai d i ncome subj ect t o ‘ Char geunder Chapt er - I I , as busi ness i ncome underChapt er - I V- D r ead wi t h sub- cl ause ( i ) of sub-sect i on 24 of sect i on 2 of t he I ncome TaxAct ?”t he case and i n l aw, t heHon’ bl e I TAT wasr i ght i n l aw i n di smi ssi ng appeal of t heRevenue obser vi ng t hat ‘ i n vi ew of cat egor i calf i ndi ng of t he Supr eme Cour t we hol d t hat t heCI T( A) was cor r ect i n hol di ng t hat advanceagai nst depr eci at i on cannot be added under t hecomput at i on oft he nor mal i ncome’ , wher eas t heHon’ bl e Supr eme Cour t i n i t s deci si on dat ed05. 01. 2010 has hel d t hat t he ‘ advance agai nstdepr eci at i on’ i s ‘ i ncome r ecei ved i n advance’ ,t hus maki ng t he sai d i ncome subj ect t o ‘ Char geunder Chapt er - I I , as busi ness i ncome underChapt er - I V- D r ead wi t h sub- cl ause ( i ) of sub-sect i on 24 of sect i on 2 of t he I ncome TaxAct ?” 2.Whet her , on t he f act s and i n ci r cumst ances oft he case and i n l aw, t heHon’ bl e I TAT wasr i ght i n l aw i n del et i ng t he addi t i on ofRs. 47, 88, 00, 000/ - made by t heAssessi ngOf f i cer under sect i on 143( 3) ( and not undersect i on 115JB) on account of “ Advance Agai nstDepr eci at i on” i gnor i ng t he pr ovi si ons ofsect i on 2( 24) r ead wi t h sect i on28 of t heI ncome Tax Act , 1961, whi ch pr ovi des t hat“ i ncome” i ncl udes pr of i t s and gai ns and t hepr of i t s and gai ns of any busi ness orpr of essi on car r i ed on by t he assessee at anyt i me dur i ng t he pr evi ous year i s t axabl e? 2.Whet her , on t he f act s and i n ci r cumst ances oft he case and i n l aw, t heHon’ bl e I TAT wasr i ght i n l aw i n del et i ng t he addi t i on ofRs. 47, 88, 00, 000/ - made by t heAssessi ngOf f i cer under sect i on 143( 3) ( and not undersect i on 115JB) on account of “ Advance Agai nstDepr eci at i on” i gnor i ng t he pr ovi si ons ofsect i on 2( 24) r ead wi t h sect i on28 of t heI ncome Tax Act , 1961, whi ch pr ovi des t hat“ i ncome” i ncl udes pr of i t s and gai ns and t hepr of i t s and gai ns of any busi ness orpr of essi on car r i ed on by t he assessee at anyt i me dur i ng t he pr evi ous year i s t axabl e? 3.Whet her , on t he f act s and i n ci r cumst ances oft he case and i n l aw, t heHon’ bl e I TAT wasr i ght i n l aw i n conf i r mi ng t he or der of Ld.CI T( A) i n del et i ng t he addi t i on ofRs. 51, 80, 00, 000/ - made by AO i n nor mal i ncomeas wel l as book pr of i t comput ed u/ s 115JB ona/ c of t ar i f f adj ust ment s bei ng unascer t ai nedl i abi l i t y?4.Whet her , on t he f act s and i n ci r cumst ances oft he case and i n l aw, t heHon’ bl e I TAT wasr i ght i n l aw i n hol di ng t hat ‘ t he cont ent i onof t he AO t hat t hi s l i abi l i t y has notcr yst al l i zed i s al so not cor r ect and t he AOhas not appr eci at ed t he f act s i n t he r i ghtper spect i ve’ di sr egar di ng t he f act t hat l at eron, t heCERC act ual l y appr oved t he t ar i f fr at es whi ch wer e di f f er ent f r om t he r at espr oposed by t he assessee and t hequant i f i cat i on of adj ust ment of t ar i f f wasevi dent l y not an ascer t ai ned l i abi l i t y dur i ngt he year under consi der at i on.5.Whet her , on t he f act s and i n ci r cumst ances oft he case and i n l aw, t heHon’ bl e I TAT wasr i ght i n l aw i n del et i ng di sal l owance ofRs. 27, 05, 83, 117/ - made by t he AO i n comput i ngbook pr of i t u/ s 115 JB on a/ c of pr ovi si onspr ovi si on made f or gr at ui t y, l eave encashment ,post r et i r ement medi cal benef i t s, LTC, Baggageal l owance and Mat chi ng Cont r i but i on on LeaveEncashment even when t he assessee has f ai l edt o est abl i sh t hese pr ovi si ons t o be ofascer t ai ned i n nat ur e. 6.Whet her , on t he f act s and i n ci r cumst ances oft he case and i n l aw, t heHon’ bl e I TAT wasr i ght i n l aw i n del et i ng di sal l owance ofRs. 1, 00, 25, 510/ - made by t he Assessi ng Of f i ceri n comput i ng t he book- pr of i t u/ s 115JB i nr espect of depr eci at i on cl ai med on l and af t eramor t i zat i on of l and by t he assessee becauset her e i s no depr eci at i on al l owabl e on l andunder Compani es Act and no r at e ofdepr eci at i on i s pr ovi ded i n schedul e XI V ofCompani es Act ? 7.Whet her , on t he f act s and i n ci r cumst ances oft he case and i n l aw, t heHon’ bl e I TAT wasr i ght i n l aw i n appl yi ng r at i o of deci si on i ncase of M/ s Apol l o Tyr es 255 I TR 273 ( SC) whent he comput at i on of book pr of i t was not as perCompani es Act and wr ongl y cl ai med depr eci at i onon l and not al l owabl e i n Compani es Act . ” 3.I t i s agr eed t hat quest i on Nos. 1, 2, 5, 6 and 7 ar el i abl e t o be answer ed i n f avour of t he r espondent - assessee i nvi ew of ouror der and j udgment dat ed 28. 02. 2018 i n t heassessee’ s case i n I TA No. 136 of 2015. 4.The appeal i s admi t t ed on t he subst ant i al quest i onsof l aw r ai sed i n quest i on Nos. 3 and 4 whi ch can be deal t wi t ht oget her . Re: Quest i on Nos. 3 and 4: 7.Whet her , on t he f act s and i n ci r cumst ances oft he case and i n l aw, t heHon’ bl e I TAT wasr i ght i n l aw i n appl yi ng r at i o of deci si on i ncase of M/ s Apol l o Tyr es 255 I TR 273 ( SC) whent he comput at i on of book pr of i t was not as perCompani es Act and wr ongl y cl ai med depr eci at i onon l and not al l owabl e i n Compani es Act . ” 3.I t i s agr eed t hat quest i on Nos. 1, 2, 5, 6 and 7 ar el i abl e t o be answer ed i n f avour of t he r espondent - assessee i nvi ew of ouror der and j udgment dat ed 28. 02. 2018 i n t heassessee’ s case i n I TA No. 136 of 2015. 4.The appeal i s admi t t ed on t he subst ant i al quest i onsof l aw r ai sed i n quest i on Nos. 3 and 4 whi ch can be deal t wi t ht oget her . Re: Quest i on Nos. 3 and 4: 5.Ther espondent - assessee sel l s el ect r i ci t y t o t heSt at e El ect r i ci t y Boar ds ( DI SCOMs) . The t ar i f f i s det er mi nedand i dent i f i ed by t he Cent r al El ect r i ci t y Regul at or yCommi ssi on ( CERC) . The assessee f i l ed i t s r et ur n decl ar i ng al oss of about Rs. 225. 31 cr or es. The case was sel ect ed f orscr ut i ny and t he pr oceedi ngs pur suant t her et o ensued. Theassessee comput ed book pr of i t under sect i on 115JB at aboutRs. 58 cr or es i n t he or i gi nal r et ur n. The Assessi ng Of f i cer ,upon exami ni ng t he comput at i on of book pr of i t , not i ced t hat t he pr ovi si on f or t ar i f f adj ust ment of about Rs. 51. 80 cr or eswas not consi der ed f oraddi t i on whi l e comput i ng t he bookpr of i t under sect i on 115JB. The assessee answer ed t he not i cei ssued by t he Assessi ng Of f i cer under sect i on 143( 2) . 6.The f act s ar e admi t t ed. For t he pur pose of answer i ngt hese quest i ons, i t i s suf f i ci ent t o not e t hat t he assesseer ecei ved an amount of Rs. 1713. 79 cr or es f or t he r el evantAssessmentYear2006- 07. Theassessee, however , adj ust edt ar i f f i n t he sum of Rs. 51. 80 cr or es. The assessee di d so onaccount of t he manner i n whi ch i t i s r equi r ed t o comput e t het ar i f f f or t he sal e of el ect r i ci t y dur i ng t he f i nanci al yeari n quest i on vi z. 2005- 06. I t i s i ni t i al l y or pr ovi si onal l ychar ged at t he i mmedi at el y pr evi ous r at e. The t ar i f f was f i xedf or t he per i od 01. 04. 2001 t o 31. 03. 2004. That i s not t he f i nalt ar i f ft hat woul d be char ged f or t he subsequent per i od.Fort he subsequent year , t he assessee i s r equi r ed t o submi t i t sappl i cat i on bef or e t he CERC f or r evi si on of t ar i f f . Thus, i nt he pr esentcase, t heassessee was r equi r ed t o submi t i t sappl i cat i on bef or e t he CERC f or r evi si on of t ar i f f f or t heper i od 01. 04. 2004 t o 31. 03. 2009.Af t er t he cl ose of t hepr evi ous year on 31. 03. 2004, t heCERC appr oved t he t ar i f fr at es by or der s dat ed 29. 05. 2006 and 31. 05. 2006 f or i t s t wopr oj ect s Chamer a and Rangi t f or t he per i od 01. 04. 2005 onwar dsi . e.r el evant t o t he cur r entAssessment Yeari . e. 2006- 07onwar ds.The CERC f i xed t he t ar i f fatr at es l ower t han whatwas demanded by t he r espondent . I n ot her wor ds, wher eas, t heassessee cl ai medat ar i f f at a par t i cul ar r at e, t heCERCappr oved t he t ar i f f at a di f f er ent r at e. I n vi ew t her eof , t he Assessi ng Of f i cer hel d t hat t hel i abi l i t y i s not ascer t ai ned and i s cont i ngent upon t he or derof t he CERC. The Assessi ng Of f i cer hel d: - “ The CERC may have kept t he t ar i f f at t he samel evel or have r educed by a f act or whi ch i s notcer t ai n on t he dat e of pr ovi si oni ng andt her ef or e, t he l i abi l i t y cannot beascer t ai ned. ” I n vi ew t her eof , t he Assessi ng Of f i cer hel d t hat t hel i abi l i t y i s not ascer t ai ned and i s cont i ngent upon t he or derof t he CERC. The Assessi ng Of f i cer hel d: - “ The CERC may have kept t he t ar i f f at t he samel evel or have r educed by a f act or whi ch i s notcer t ai n on t he dat e of pr ovi si oni ng andt her ef or e, t he l i abi l i t y cannot beascer t ai ned. ” Accor di ngl y, t he Assessi ng Of f i cer added back Rs. 51. 80 cr or est o t he book pr of i t f or t he pur pose of comput i ng t he mi ni mumal t er nat e t ax under sect i on 115JB. 7.The CI T ( Appeal s)uphel d t he assessee’ s cont ent i ont hat as per t he Compani es Act , 1956, Schedul e I V andAccount i ng St andar d- 1 al l known l i abi l i t i es have t o beaccount ed f or as t he assessee f ol l ows t he mer cant i l e syst em ofaccount i ng. I t was al so hel d t hat t heassessee pr oper l yexpl ai ned var i ous f act or s l eadi ng t o t ar i f f adj ust ment ofRs. 51. 80 cr or es made i n t he books; t hat t he or der s of t he CERCar e bi ndi ng; t hat t he adj ust ment made by t he assessee adher edt o t he r ul es/ gui del i nes/ or der s of t he CERC and t hat t hi s wasnot a cont i ngent l i abi l i t y as cal cul at ed as per t heCERCgui del i nes and i s, t her ef or e, an accr ued l i abi l i t y. The Tr i bunal uphel d t he or der of t he CI T ( Appeal s)but onl y on t he gr ound t hat a si mi l ar i ssue was r ai sed bef or et he Tr i bunal by t he Revenue/ appel l ant i n i t s appeal f or t heAssessment Year 2005- 06 and t hat t he Tr i bunal had, by an or derdat ed 30. 09. 2014, conf i r med t he del et i on of an amount si mi l ari n nat ur e. 8.The quest i on of l aw t hat ar i ses i s whet her t het ar i f f char ged by t he assessee f r om 01. 04. 2005 and t i l l t he f i nal or der of t he CERC i s cont i ngent and cannot be sai d t ohave cr yst al l i zed or at t ai ned cer t ai nt y and i s, t her ef or e,l i abl e t o be added back t o t he assessee’ s i ncome. 9.As we not ed ear l i er , t he assessee i s not ent i t l ed t of i x t he t ar i f f . I t i s t he CERC whi ch f i xes t he t ar i f f , al bei tupon t he assessee’ s appl i cat i on. Upon compl et i on of t he per i odf or whi ch t ar i f f i s f i xed, t he assessee i s bound t o make anappl i cat i on t o t he CERC f or f i xi ng t he f ut ur e t ar i f f . Thi sappl i cat i on i s made af t er t he compl et i on of t he ear l i er per i odf or whi ch t he t ar i f f i s f i xed. Ther e i s, t her ef or e, a t i me- l agbet ween t he expi r y of t he per i od f or whi ch t he t ar i f f i s f i xedand t he dat e on whi ch t heCERC f i xes t he t ar i f f f or t hesubsequent per i od. I n t he pr esent case,t he ear l i er per i odcame t o an end on 31. 03. 2004 and t he t ar i f f was f i xed f or t hesubsequent per i od i . e. 01. 04. 2004 t o 31. 03. 2009 on 29. 05. 2006and 31. 05. 2006. On account t her eof , t her e was a di f f er ence i nt he t ar i f f col l ect ed t o t he ext ent of Rs. 51. 80 cr or es f or t heassessment year . Dur i ng t hi s per i od, namel y, 01. 04. 2004onwar d, t he assessee made an adj ust ment t owar ds t ar i f f char gedas per i t s appl i cat i on f i l ed wi t h t he CERC. The assesseehas been f ol l owi ng t hi s account i ngpr act i ce consi st ent l y i n accor dance wi t h t he pr i nci pl e ofconser vat i sm as l ai d down i n Account i ng St andar d- 1 as perwhi ch al l known ascer t ai ned l i abi l i t i es have t o be account edf or . Theassessee i s f ol l owi ng t he mer cant i l e syst em ofaccount i ng. 10.The r el i ance pl aced byMr . Ved Jai n, t he l ear nedcounselappear i ng on behal f of t he r espondent / assessee upon The assesseehas been f ol l owi ng t hi s account i ngpr act i ce consi st ent l y i n accor dance wi t h t he pr i nci pl e ofconser vat i sm as l ai d down i n Account i ng St andar d- 1 as perwhi ch al l known ascer t ai ned l i abi l i t i es have t o be account edf or . Theassessee i s f ol l owi ng t he mer cant i l e syst em ofaccount i ng. 10.The r el i ance pl aced byMr . Ved Jai n, t he l ear nedcounselappear i ng on behal f of t he r espondent / assessee upon t he j udgment of t he Supr eme Cour t i n Bhar at Ear t h Mover s vs.Commi ssi oner of I ncome- Tax,[ 2000] 245 I TR 428 ( SC) i s wel l -f ounded.I n t hat case t heassessee had cr eat ed a f und bymaki ng a pr ovi si on f or meet i ng i t s l i abi l i t y ar i si ngonaccount of accumul at ed ear ned/ vacat i on l eavet hat t heempl oyees wer e ent i t l ed t o f or t he r el evantassessment year .An amount of about Rs. 62 l akhs was set apar t i n a separ at eaccount as pr ovi si on f or encashment of accr ued l eave whi ch wascl ai med as a deduct i on. The Tr i bunal hel d t hat t he assesseewas ent i t l ed t o do so wher eas t he Hi gh Cour t hel d t hat t hepr ovi si on f or accr ued l eave sal ar y was a cont i ngent l i abi l i t yand, t her ef or e, was not a per mi ssi bl e deduct i on. The Hi ghCour t based i t s j udgment on t he gr ound t hat t he l i abi l i t y wi l lar i se onl y i f an empl oyee does not go on l eave and appl i es f orencashment . The Supr eme Cour t hel d: - “ 4. The l aw i s set t l ed: i f a busi ness l i abi l i t yhas def i ni t el y ar i sen i n t he account i ng year , t hededuct i on shoul d be al l owed al t hough t hel i abi l i t y may have t o be quant i f i ed anddi schar ged at a f ut ur e dat e. What shoul d becer t ai n i s t he i ncur r i ng of t he l i abi l i t y. I tshoul d al so be capabl e of bei ng est i mat ed wi t hr easonabl e cer t ai nt y t hough t he act ualquant i f i cat i on may not be possi bl e. I f t heser equi r ement s ar e sat i sf i ed t he l i abi l i t y i s not acont i ngent one. The l i abi l i t y i s i n pr aesent it hough i t wi l l be di schar ged at a f ut ur e dat e. I tdoes not make any di f f er ence i f t he f ut ur e dat eon whi ch t he l i abi l i t y shal l have t o bedi schar ged i s not cer t ai n. 5. I n Met al Box Co. of I ndi a Lt d. v. Wor kmen[ ( 1969) 73 I TR 53 : AI R 1969 SC 612] t heappel l ant Company est i mat ed i t s l i abi l i t y undert wo gr at ui t y schemes f r amed by t he Company andt he amount of l i abi l i t y was deduct ed f r om t hegr oss r ecei pt s i n t he P&L account . The Companyhad wor ked out on an act uar i al val uat i on i t sest i mat ed l i abi l i t y and made pr ovi si on f or suchl i abi l i t y not al l at once but spr ead over a number of year s. The pr act i ce f ol l owed by t heCompany was t hat ever y year t he Company wor kedout t he addi t i onal l i abi l i t y i ncur r ed by i t ont he empl oyees put t i ng i n ever y addi t i onal year ofser vi ce. The gr at ui t y was payabl e on t het er mi nat i on of an empl oyee’ s ser vi ce ei t her duet o r et i r ement , deat h or t er mi nat i on of ser vi ce —t he exact t i me of occur r ence of t he l at t er t woevent s bei ng not det er mi nabl e wi t h exact i t udebef or ehand. A f ew pr i nci pl es wer e l ai d down byt hi s Cour t , t he r el evant of whi ch f or our pur posear e ext r act ed and r epr oduced as under : ( i ) f or an assessee mai nt ai ni ng hi s account s onmer cant i l e syst em, a l i abi l i t y al r eady accr ued,t hough t o be di schar ged at a f ut ur e dat e, woul dbe a pr oper deduct i on whi l e wor ki ng out t hepr of i t s and gai ns of hi s busi ness, r egar d bei nghad t o t he accept ed pr i nci pl es of commer ci alpr act i ce and account ancy. I t i s not as i f suchdeduct i on i s per mi ssi bl e onl y i n case of amount sact ual l y expended or pai d; ( i ) f or an assessee mai nt ai ni ng hi s account s onmer cant i l e syst em, a l i abi l i t y al r eady accr ued,t hough t o be di schar ged at a f ut ur e dat e, woul dbe a pr oper deduct i on whi l e wor ki ng out t hepr of i t s and gai ns of hi s busi ness, r egar d bei nghad t o t he accept ed pr i nci pl es of commer ci alpr act i ce and account ancy. I t i s not as i f suchdeduct i on i s per mi ssi bl e onl y i n case of amount sact ual l y expended or pai d; ( i i ) j ust as r ecei pt s, t hough not act ual r ecei pt sbut accr ued due ar e br ought i n f or i ncome t axassessment , so al so l i abi l i t i es accr ued due woul dbe t aken i nt o account whi l e wor ki ng out t hepr of i t s and gai ns of t he busi ness; ( i i i ) a condi t i on subsequent , t he f ul f i l ment ofwhi ch may r esul t i n t he r educt i on or evenext i nct i on of t he l i abi l i t y,woul d not have t heef f ect of conver t i ng t hat l i abi l i t y i nt o acont i ngent l i abi l i t y; and ( i v) a t r ader comput i ng hi s t axabl e pr of i t s f or apar t i cul ar year may pr oper l y deduct not onl y t hepayment s act ual l y made t o hi s empl oyees but al sot he pr esent val ue of any payment s i n r espect oft hei r ser vi ces i n t hat year t o be made i n asubsequent year i f i t can be sat i sf act or i l yest i mat ed. 6. So i s t he vi ew t aken i n Cal cut t a Co. Lt d. v.CI T [ ( 1959) 37 I TR 1 : AI R 1959 SC 1165] wher ei nt hi s Cour t has hel d t hat t he l i abi l i t y on t heassessee havi ng been i mpor t ed, t he l i abi l i t ywoul d be an accr ued l i abi l i t y and woul d notconver t i nt o a condi t i onal one mer el y because t hel i abi l i t y was t o be di schar ged at a f ut ur e dat e.Ther e may be some di f f i cul t y i n t he est i mat i ont her eof but t hat woul d not conver t t he accr uedl i abi l i t y i nt o a condi t i onal one; i t was al ways open t o t he t ax aut hor i t i es concer ned t o ar r i veat a pr oper est i mat e of t he l i abi l i t y havi ngr egar d t o al l t he ci r cumst ances of t he case. ” 11.Al t hough t he j udgment was not under sect i on 115JB,t he r at i o appl i es equal l y t o t he case bef or e us as t hequest i on i s t he same. The l i abi l i t y i n t he pr esent case al sohas def i ni t el y ar i sen, al t hough i t woul d have t o be quant i f i edand di schar ged t o adj ust i t at a f ut ur e dat e,i . e. , t he dat eon whi ch t heCERC det er mi ned t he t ar i f f . I t i s not evensuggest ed by t he r evenue t hat t he l i abi l i t y was not l i kel y t obe i ncur r ed.Consi der i ngt he nat ur e of t heassessee’ sent er pr i se and t he mode off i xat i on of t ar i f f , i t i sr easonabl y cer t ai n t hat t he l i abi l i t y woul d ar i se. Nor i s i tsuggest ed t hat t he l i abi l i t y was not capabl e of bei ngest i mat ed wi t h r easonabl e cer t ai nt y. The assessee est i mat edt he l i abi l i t y af t er t aki ng al l t he r el evant f act or s i nt oconsi der at i on. I ndeed, t he l i abi l i t y was enhanced on accountof t he CERC f i xi ng t he t ar i f f at a r at e l ower t han t hat soughtby t he assessee. The di f f i cul t y i n est i mat i ng does not conver tt he accr ued l i abi l i t y i nt o a condi t i onal one as hel d by t heSupr eme Cour t . Fur t her , as hel d by t he Supr eme Cour t , i t i supon t he t ax aut hor i t i es t o ar r i ve at a pr oper est i mat e of t hel i abi l i t y havi ng r egar d t o al l t he ci r cumst ances of t he case.However , i t i s not suggest ed t hat t he l i abi l i t y was notpr oper l y est i mat ed. 12.The Del hiHi gh Cour t deal t wi t h a si mi l ar quest i oni n NTPC Lt d. Vs. Commi ssi oner of I ncome Tax- V, 2014( 4) TMI 683– Del hi Hi gh Cour t . We wer e i nf or med t hat t he nat ur e of t heNTPC act i vi t i es i n busi ness and t he manner i n whi ch i t f i xes 12.The Del hiHi gh Cour t deal t wi t h a si mi l ar quest i oni n NTPC Lt d. Vs. Commi ssi oner of I ncome Tax- V, 2014( 4) TMI 683– Del hi Hi gh Cour t . We wer e i nf or med t hat t he nat ur e of t heNTPC act i vi t i es i n busi ness and t he manner i n whi ch i t f i xes t he t ar i f far e t he same. The Di vi si on Bench of t he Del hi Hi ghCour t hel d: - “ 21.Ther e i s aut hor i t y, i n t he f or m of Supr emeCour t j udgment si n Shr ee Saj j an Mi l l s Lt d v. CI T,( 1985) 156 I TR 585, Bhar atEar t h Mover s Lt d v.CI T, ( 2000) 245 I TR 428 and Met al BoxCompany ofI ndi a Lt d v. Thei r Wor kmen, ( 1969) 73 I TR 53, t hatapr ovi si on made on a r easonabl e basi s, i t woul dbe i n t he nat ur e ofan ascer t ai ned l i abi l i t y andt hat i n a mer cant i l e syst em ofaccount i ng,pr ovi si on f or l i abi l i t y ascer t ai ned dur i ng t hecour se oft he r el evant account i ng per i od, whi chi s payabl e at a f ut ur e i sper mi ssi bl e. ” We ar e i n r espect f ul agr eement wi t h t hi s concl usi on based ont he j udgment s ci t ed t her ei n. 13.Quest i on Nos. 3 and 4 ar e, t her ef or e, answer ed i nf avour of t he assessee and agai nst t he r evenue. 14.The appeal i s accor di ngl y di smi ssed. ( S. J. VAZI FDAR)CHI EF JUSTI CE 21. 03. 2018par kash ( AVNEESH JHI NGAN)JUDGE NOTE: Whet her speaki ng/ non- speaki ng: Speaki ng Whet her r epor t abl e: YES/ NO