2008 (3) TMI 361 - AT - Income Tax

Summary

Issues involved:
The issues involved in this judgment relate to the treatment of the return filed by the assessee on different dates, specifically whether the return filed on 27-3-2003 should be considered a revised return u/s 139(5) or a belated return u/s 139(4). Additionally, the judgment also addresses the disallowance of provisions for expenses and prior period expenses relating to a leave travel assistance scheme.

Treatment of Return:
The first issue pertains to whether the return filed on 31-10-2001, without accompanying accounts, should be considered valid or not. The CIT (Appeals) directed the Assessing Officer to treat this return as a revised return u/s 139(5), allowing the carried forward loss. The department contended that the return was not valid due to lack of accounts. However, the Tribunal upheld the CIT (Appeals) decision, stating that the return filed on 27-3-2003, with audited accounts, should be considered a valid revised return within the time allowed u/s 139(1).

Disallowance of Provisions for Expenses:
The second issue involves the disallowance of Rs. 2,90,40,319 made by the Assessing Officer on account of provision for expenses. The CIT (Appeals) found these provisions to be ascertained liabilities and directed their allowance as deductions. The Tribunal upheld this decision, stating that the details provided by the assessee were sufficient for verification.

Prior Period Expenses:
The third issue concerns the disallowance of Rs. 15,70,079 on account of prior period expenses related to a leave travel assistance scheme. The CIT (Appeals) allowed only the provision for the year under appeal, excluding provisions for earlier years. The Tribunal agreed with this decision, stating that the provision for the current year is an ascertained liability, while provisions for earlier years cannot be allowed as deductions.

In conclusion, the Tribunal partly allowed the department's appeal, dismissed the assessee's appeal, and upheld the decisions regarding the treatment of returns, disallowance of provisions for expenses, and prior period expenses related to the leave travel assistance scheme.