2022 (4) TMI 222 - AT - Income Tax

Addition of FSA charges on the ground that the same relates to prior period item - HELD THAT - As pursuant to the bills issued in the financial year 2012-13 and referred to in the demand were payable in instalments and to that extent, the liability is crystallized. The expenditure is genuine. However, how many instalments were paid and to what extend the assessee is entitled to claim as expenditure is a fact to be verified at the end of the AO. Suffice it to say that insofar as such payments were considered, the liability was crystallized only during the financial year 2012-13 pursuant to which the payments were made by the assessee and claimed as expenditure during the A.Y. 2013-14. With this view of the matter, we are of the considered opinion that inasmuch as the bills were issued in the financial year 2012-13 and as a result of litigation, the APSPDCL raised the demand on 7.11.2015 for payments of dues up to 06.08.2016 in instalments and the assessee paid such instalments, they are entitled to claim such payments in the A.Y. 2013-14. Observing thus, we restore the issue to the file of the learned Assessing Officer for verification of the amounts paid during the financial year 2012-13 and to grant relief. Grounds 2 3 of this appeal are accordingly allowed for statistical purposes. Additions u/s. 2(24)(x) r.w.s. 36(1)(va) - HELD THAT - Considering the hardships pleaded by the assessee and also in view of the fact that no rights are crystallized in the parties by such lapse of the assessee, we are of the opinion that the technicalities should not be allowed to overrun the delivery of substantial justice and this case deserves a lenient view. We accordingly set aside ground No. 4 of this appeal to the file of the learned CIT(A) for adjudication on merits. Ground No. 4 accordingly allowed for statistical purposes.

Summary

Issues:
1. Disallowance of FSA charges for A.Y. 2013-14
2. Disallowance under section 43B and 40(a)(ia) of the Act
3. Addition of interest u/s. 244A
4. Adjudication of additional grounds by CIT(A)
5. Technical issues in online filing of appeals

Analysis:

Issue 1: Disallowance of FSA charges for A.Y. 2013-14
The Assessing Officer disallowed FSA charges amounting to ?45,14,399 for the A.Y. 2013-14, stating that the liability for these charges was unascertained as they pertained to previous years. The CIT(A) upheld this disallowance, emphasizing the unascertained nature of the liability. However, the appellant argued that the liability crystallized in the financial year 2012-13 when bills were issued and payments were made, making the expenditure genuine. The tribunal agreed with the appellant, noting that the liability was crystallized in 2012-13, and therefore allowed the appeal on this ground.

Issue 2: Disallowance under section 43B and 40(a)(ia) of the Act
The Assessing Officer made certain additions under section 43B and 40(a)(ia) of the Act, which were upheld by the CIT(A). The appellant contended that the CIT(A) did not adjudicate on these grounds due to technical issues in online filing of appeals. The tribunal acknowledged the technical difficulties faced by the appellant in online filing and remanded the issue to the CIT(A) for adjudication on merits.

Issue 3: Addition of interest u/s. 244A
An addition of interest under section 244A was made by the Assessing Officer, which was not specifically addressed in the CIT(A)'s order. The tribunal did not provide detailed analysis on this issue in the judgment.

Issue 4: Adjudication of additional grounds by CIT(A)
The appellant raised various additional grounds before the CIT(A), which were not adjudicated upon by the CIT(A) as they were not specifically mentioned in the appeal form. The tribunal considered the technical difficulties faced by the appellant in online filing and remanded the issue to the CIT(A) for proper adjudication.

Issue 5: Technical issues in online filing of appeals
The appellant faced technical challenges in online filing of appeals, leading to certain grounds not being properly uploaded. The tribunal recognized the technical constraints and granted leniency, allowing the appeal for statistical purposes and remanding certain issues for proper adjudication by the CIT(A).

In conclusion, the tribunal allowed the appeal on the disallowance of FSA charges for A.Y. 2013-14, remanded issues related to section 43B and 40(a)(ia) for adjudication, and acknowledged the technical challenges faced by the appellant in online filing of appeals.