Per R.V. Easwar, Vice President: These are cross appeals relating to assessment year 2001-02. assessee is public limited company engaged in manufacture of automotive and industrial application components, such as, pistons, pins and trading of rings and circlips. appeals arise out of assessment order passed under section 143(3)(ii ) of Income-tax Act on 26-3-2004. Department's Appeal 2. first ground is that CIT (Appeals) erred in directing Assessing Officer to treat return filed on 27-3-2003 as revised return under section 139(5) of Act. It is contended that return was rightly treated by Assessing Officer as belated return under section 139(4). brief facts giving rise to this ground are as follows. assessee filed return of income on 31- 10-2001 in which loss of Rs. 34,83,64,480 was claimed. There is no dispute that this return was filed in time. Admittedly, it was not accompanied by profit and loss account, balance sheet, etc. On 27-3-2003, assessee filed another return of income in which loss was enhanced to Rs. 37,91,62,339. profit and loss account, balance sheet etc., were attached to this return. Assessing Officer took view that return filed on 31-10-2001 was not valid return because it was not accompanied by accounts and consequently held that it was only return filed on 27-3-2003, accompanied by accounts, was first valid return filed by assessee. He further took view that since return filed on 27-3-2003 was filed beyond time prescribed by section 139(3), loss declared therein cannot be carried forward. On appeal, CIT (Appeals) took view that return filed on 27-3-2003 was revised return filed under section 139(5) and it took place of return filed earlier under section 139(1) and, therefore, must be taken to have been filed within time allowed under section 139(3). He, therefore, directed Assessing Officer to carry forward loss. 3. In appeal before us, contention of department is that return filed on 31-10-2001 was not accompanied by accounts and, therefore, cannot be treated as valid return and, therefore, it cannot be revised under section 139(5). On other hand, learned representative for assessee pointed out that return filed on 31-10-2001 has not been treated as invalid return under section 139(9) and if that is so, return filed on 27-3-2003 has been rightly considered to be valid revised return under section 139(5). He has also pointed out that return filed on 31-10-2001 was processed under section 143(1) which means that it was accepted as valid return. He has further drawn our attention to pages 14 to 44 of paper book containing annexures to return filed on 31-10-2001 and there from has submitted that balance sheet and profit and loss account were filed along with said return but they were not audited either under Companies Act or under section 44AB of Income-tax Act. He drew our attention to judgment of Madras High Court in CIT v. Periyar District Co-operative Milk Producers Union Ltd. [2004] 266 ITR 705 in which it was held that return of loss submitted under section 139(3) is deemed to be return filed under section 139(1). It was, therefore, held that return filed under section 139(3) takes character of return under section 139(1) and, therefore, can be revised under section 139(5) claiming higher loss and that such loss has to be carried forward. 4. On careful consideration of rival contentions, we are of view that decision of CIT (Appeals) is correct. return of loss filed on 31- 10-2001 was accompanied by profit and loss account and balance sheet but they were not audited. tax audit report under section 44AB was also not filed. However, Assessing Officer did not issue any defect notice under section 139(9) but proceeded to process return under section 143(1) of Act. This shows that he has not treated return as invalid return. There is no dispute that this return was filed in time. It was revised by return filed on 27- 3-2003 in which higher loss was claimed. This return was undisputedly accompanied by audited accounts. Section 139(5) gives assessee right to file revised return if he discovers any omission or wrong statement in return filed originally. Such return can be filed at any time before expiry of one year from end of relevant assessment year or before completion of assessment, whichever is earlier. In present case, revised return was filed on 27-3-2003 which is within one year from end of assessment year in appeal. assessee discovered omission to attach audited accounts to return filed earlier and accordingly filed revised return. revised return takes place of original return and must be taken to have been filed within time allowed under section 139(1), as required by section 139(3). In case of CIT v. Kulu Valley Transport Co. (P.) Ltd. [1970] 77 ITR 518 it was held by Supreme Court by majority that section 22(3) of 1922 Act, which enabled assessee to file belated return at any time before completion of assessment was in nature of proviso to section 22(1) which provided for return to be submitted within time fixed by general notice and it was accordingly held that if section 22(3) is complied with then section 22(1) also must be held to have been complied with. In section 22(3) of 1922 Act, there was provision both for filing belated return where assessee had not filed any return either under general notice under section 22(1) or under special notice under section 22(2) and also for filing revised return if assessee discovers any mistake or wrong statement in return originally filed. Supreme Court was concerned with case where assessee fell under first part of sub-section, viz., case of belated return. judgment was to effect that even belated return filed at any time before assessment is made must be held to be return filed within time allowed under section 22(1) and loss has to be permitted to be carried forward. In present Act, section 139(5) deals exclusively with revised return; sub-section (4) of section 139 deals exclusively with belated return. If ruling of Supreme Court is applied under present Act, result would be that belated return of loss filed by assessee will have to be treated as return under section 139(1) and consequently loss will have to be allowed to be carried forward. Thus, in present case, return filed by assessee on 27-3-2003, even if it is to be considered as belated return of loss as has been considered by Assessing Officer, must be held to be return filed within time allowed under section 139(1) and consequently loss has to be carried forward. It cannot be possibly argued that sub-section (3) of section 139 specifically says that if loss is to be carried forward assessee shall file loss return within time allowed under sub-section (1), because sub-section (3) of section 139 is similar to sub-section (2A) of section 22 of 1922 Act which also contained similar requirement, notwithstanding which Supreme Court held that belated return of loss should be considered to be valid return under sub-section (1) of section 22 itself. In fact, several judgments of different High Courts held that ruling of Supreme Court in Kulu Valley Transport Co. (P.) Ltd.'s case (supra) was applicable under 1961 Act also because provisions of section 22 of old Act and those of section 139 of new Act were materially identical. However, there is another provision in 1961 Act - section 80 - which also deals with loss return. This section also originally provided that loss return could be filed within time allowed under section 139, without specifying sub-section of section 139, with result that Supreme Court decision continued to be applicable under present Act also. But from assessment year 1988-89, crucial change was made to this section by Finance Act, 1987 and it was provided that loss return shall be filed within time allowed under sub-section (1) of section 139 or within such further time thereafter as may be allowed by Assessing Officer. result of above discussion is that from assessment year 1988-89 judgment of Supreme Court in Kulu Valley Transport Co. (P.) Ltd.'s case (supra) ceased to have effect under present Act. In this view of matter, it has to be held that if return filed on 27-3-2003 is held to be belated return filed under sub-section (4) of section 139, then assessee cannot have benefit of carrying forward business loss. 5. That takes us to original question whether return filed on 27-3- 2003 is to be treated as valid revised return under section 139(5). earlier return filed on 31-10-2001 not having been considered as invalid return as can be seen from fact that Assessing Officer processed same under section 143(1) and also did not issue any defect notice as required by section 139(9), we are of view that return filed on 27-3-2003 is valid revised return. revised return takes place of original return and original return having been admittedly filed within time allowed under section 139(1), loss will have to be carried forward. return filed on 31-10-2001 is return of loss filed in accordance with section 139(3) and can be validly revised under section 139(5) as held by judgment of Madras High Court cited supra. Thus whichever way matter is looked at, loss claimed in return filed on 27-3-2003 is to be carried forward to subsequent years. order of CIT (Appeals) on this point is upheld and ground is dismissed. 5.1 second ground is that CIT (Appeals) erred in deleting disallowance of Rs. 2,90,40,319 made by Assessing Officer on account of provision for expenses. perusal of assessment order shows details of expenses (please see chart at page 2 of assessment order). According to Assessing Officer, all aforesaid provisions were unascertained or contingent liabilities not allowable as deduction. CIT (Appeals) however found on going through details of expenses compiled at pages 165 to 357 of paper book that they are all ascertained liabilities. He further observed that Assessing Officer was merely guided by use of word 'Provision' while narrating expenses without verifying whether provisions related to ascertained liabilities or contingent liabilities. He accordingly directed Assessing Officer to allow provisions as deduction. 6. We have considered issue. argument of department was that details may be restored to Assessing Officer for verification but we do not think it is really necessary since details filed at pages 165 to 357 of t h e paper book, relating to various provisions aggregating to Rs. 2,90,40,319, have been certified to have been filed 'Before authorities below' in paper book filed by assessee. In this view of matter, we uphold decision of CIT (Appeals) and dismiss ground. 7. third ground is that CIT (Appeals) erred in deleting disallowance of Rs. 15,70,079 made on account of prior period expenses relating to leave travel assistance scheme. Assessing Officer disallowed same for same reasons on which provisions for expenses aggregating to Rs. 2,90,40,319 were disallowed. However, CIT (Appeals) noted that assessee himself has stated that aforesaid amount of Rs. 15,70,079 includes provision made on account of earlier years also. He, therefore, held that only provision relating to year under appeal can be allowed and directed accordingly. Whereas department is in appeal questioning decision of CIT (Appeals) allowing provision for year under appeal, assessee in its appeal has challenged decision of CIT (Appeals) insofar as it relates to provision relating to earlier years. argument of department is same as in case of ground No. 2. We are however of view that CIT (Appeals) is right in holding that provision for leave travel assistance is ascertained liability and cannot be said to be contingent liability. However, provision relating to earlier years cannot be allowed as deduction as rightly held by CIT (Appeals). We, therefore, dismiss both department's ground as well as assessee's appeal. Assessing Officer will ascertain provision relating to year under appeal and allow same as deduction. 8. In result, appeal by department is partly allowed. Assessee's Appeal 9. For reasons stated in paragraph 7 (supra), appeal filed by assessee is dismissed. 10. To sum up: ITA No. 1088/Delhi/2005 is dismissed and ITA No. 1563/Delhi/2005 is partly allowed. *** ESCORTS MAHLE LTD. v. DEPUTY COMMISSIONER OF INCOME TAX