2011 (2) TMI 1536 - AT - Income Tax

Summary

Issues involved: Appeal by revenue against CIT(A)'s order regarding deduction for prior period expenses.

Grounds of appeal:
1. CIT(A)'s order deemed erroneous in law and facts.
2. CIT(A) should have upheld AO's disallowance of deduction for prior period expenses.
3. CIT(A) failed to recognize that such expenses can be claimed in a succeeding year based on accrual.
4. Revenue argues CIT(A)'s decision is unacceptable.

Details of the judgment:
1. Revenue raised multiple grounds related to prior period expenses, emphasizing non-crystallization and accrual.
2. Assessee's counsel argued that since prior period income was offered, expenses should be allowed, citing assessing officer's own recognition of both in the assessment order.
3. Tribunal observed that the assessing officer accepted prior period income but disallowed expenses, contrary to considering the status as a whole.
4. Tribunal referenced Delhi High Court judgments supporting the allowance of prior period expenses based on the overall status.
5. Tribunal upheld CIT(A)'s decision in light of legal precedents, dismissing the revenue's appeal.