Jt.Cit (Osd)-Cc- 1(4), Mumbai vs Aditya Birla Nuvo Ltd (Since ... on 17 November, 2025
21. Coming to the objection of the revenue that spares and
catalysts were carried forward from year to year and by
the year 2002-03, it had lost its commercial value and
therefore, the claim was without merit. The learned AR's
submission that the capitalization was done by the
assessee only because of the prescription of the ICAl with
regard to the change of the accounting standard is to be
accepted. The counsel's objection that the reliance placed
by the revenue on the decision of the Delhi High Court in
P a g e | 72
ITA No. 563, 1885/Mum/2018
A.Y. 2013-14
Aditya Birla Nuvo Ltd. (Since Amalgamated with Grasim Industries Ltd.)
Delhi Tourism and T.D.C. Ltd. v. Commissioner of Income-
tax (2006) 285 ITR 114 is distinguishable on facts. In the
case before the Hon'ble Delhi High Court, the High Court
held that since the electricity charges for the electricity
consumed were a known expenditure to the assessee, the
assessee, on the basis of average could make a provision
for this expenditure for every year of assessment even if no
bill was received in a particular of assessment. As the
assessee had failed to claim this expenditure in the earlier
assessment year and having failed to discharge this duty
of providing for a known expenditure, the assessee could
not claim the electricity charges in the subsequent
assessment years. Coming to the instant case of the
assessee, on facts it is to be seen that the assessee changed
the method and started capitalization of the spares and
catalysts b cause of the change in the method of
accounting standards as prescribed by the ICAL. Coming
to the objection of the revenue as to how the spare parts
were valued, it is always the case of the assessee that it
was always valued at cost and it had never changed this
method. One of the objection of the revenue was that there
was no certificate nor evidence to show that these spa or
catalysts had lost its commercial properties nor that the
same had aged. At the time of hearing, we directed the
assessee to produce certificate from the competent
authority, which has now been placed on record. The
revenue has again raised an objection on this.