PRINCIPAL COMMISSIONER OF INCOME TAX Vs. MAZDA LTD.

JUDGEMENT

(1.) Both the appeals are filed by the Revenue concerning the same assessee. While taking up admission hearing of Tax Appeal No. 647 of 2017 we noticed that Tax Appeal No. 949 of 2013 involving similar issue has been admitted for consideration of following substantial question of law:

(2.) We therefore admit Tax Appeal No. 647 of 2017 for consideration of following question of law proposed by the Revenue:

(3.) Issues being identical, we may record facts from Tax Appeal No. 647 of 2017. The respondent-assessee is a company registered under the Companies Act and is engaged in the business of manufacturing and trading of machinery and machinery parts and manufacturing of drink concentrates. For the assessment year 2010-11, the assessee had filed a return of income on 29.09.2010 declaring total income of Rs. 14,53,78,210.00. During the scrutiny assessment, the Assessing Officer noticed that the assessee had claimed business expenditure of Rs. 75,36,037.00 by way of liquidated damages in the profit and loss account under the head 'administrative and selling expenses'. The Assessing Officer called for the details of such expenditure in response to which, the assessee stated as under: