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12. Ld. AR submitted that the assessee incurred expenses to carry out the objects of NDDB Act, 1987. Grants were given out of own funds and not out of any grants received from Central Government. Untill all the conditions are fulfilled, grants re shown as "advance" and debited to P & L account only after achievement of targets. Amount claimed is irretrievably gone-expenditure already incurred by the recipient and there exists no possibility of its conversion into loan. In Asst. Year 2003-04 the Tribunal in their recalled order held the grant as an expenditure allowable u/s 36(1)(viii) and send back to Assessing Officer for verification of -

NDDB was not a taxable entity till A.Y. 2002-03 in view of the special provisions of Section 44 of the NDDB Act, 1987. However, vide section 162 of the Finance Act, 2002, section 44 of the NDDB Act was omitted w.e.f. 1.4.2003 and hence NDDB became a taxable entity from A.Y. 2003-04 onwards.

It derives income from business of promoting, financing, constructing, sponsoring, researching, facilitating training, collecting data and such other initiatives for the development of dairy and other agriculture based and allied industries through cooperative initiatives.

57. On the other hand, ld. DR supported the order of Assessing Officer.

58. We have heard the rival contentions and perused the record. Ld. Assessing Officer while framing assessment order assessed the provisions written back at Rs.34.93 crores approx. as income u/s 41(1) of the Act taking a view that reversal of provision during the year definitely resulted into income. We further observe that assessee during the course of assessment proceedings submitted that the impugned amount of Rs.34.93 crores approx. represented write back of excess provision for doubtful debts created in the earlier years as per norms of R.B.I and original provisions were made in the years when NDDB was not liable to income-tax as per section 64 of the NDDB Act and, therefore, the said amount cannot be brought Asst. Year 2008-09 under tax. Ld. AR further submitted that no deduction has been granted to it in the assessment year in which provisions were made and therefore the provisions written back during the year cannot be brought to tax. We further observe that ld. CIT(A) deleted the impugned disallowance of Rs.34.93 crores by following the order of his predecessor for Asst.Year 2007-08 by observing as follows :-

60. The above decision of the Co-ordinate Bench was upheld by Hon. Jurisdictional High Court in Tax Appeal No. Tax Appeal No. 195 of 2014 vide judgment dated 6th May, 2014 wherein Hon. High Court has observed as under :-

Facts are not seriously in dispute. Respondent-NDDB was enjoying exemption from payment of income tax till A..Y 2002-03. During the previous year relevant to A.Y 2007-08, the assessee wrote back certain provisions made in the earlier years. These provisions were made during the period when NDDB was enjoying the tax exemption. It is also not the case of the Revenue that the assessee made any allowances against any expenditure or trading liability. In background of such facts, we need to examine the view of the Tribunal.