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TMI Blog2011 (5) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... of miscellaneous expenditure of Rs. 1,87,15,371 claimed in the P&L account has been disallowed in the computation of total income. Tax deducted at source - Under section 40(a)(i)- Since the assessee has not filed the requisite details before the Assessing Officer, the Assessing Officer disallowed the amount which has been upheld by the CIT(A). She submitted that the additional evidences should not be admitted at this stage since the assessee has not given any valid justification as to why those details could not be filed before the Assessing Officer. Prior Period Expenses - According to the AO, the legal position is that income pertaining to earlier years is taxable on receipt basis under section 41 of the Act but expenses pertaining to earlier year are not allowable as they are not pertaining to the year under consideration. - Held that:- Undoubtedly, the assessee in the instant case has failed to justify the allowability of claim of prior period expenses of Rs. 64,60,337 during the year before the Assessing Officer and CIT(A) by showing that the expenditure has crystallised during the year. - Decided against the assessee. - 905, 906 AND 1120 (MUM.) OF 2008 - - - Dated:- 25-5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer to explain and give the details of non-compete expenses of Rs. 19,59,667, the assessee filed certain details only. Subsequently, the Assessing Officer asked the assessee to explain and justify the allowability of non-compete expenses and under which provisions these expenses have been claimed as allowable expenditure. However, no reply was filed by the assessee. From the details furnished by the assessee, the Assessing Officer noted that the assessee company has entered into an agreement dated 30-6-2000 for a period of 4 years and the expenditure of Rs. 32 lakhs is to be equally distributed in the 4 years. This being the second year, the Assessing Officer held that only Rs. 8 lakhs can be allowed and the balance amount of Rs. 16 lakhs will be disallowed. He, accordingly, disallowed an amount of Rs. 16 lakhs. 6. In appeal, the CIT(A) confirmed the action of the Assessing Officer by holding that the fee has been paid to restrict the promoter to compete in the line of Internet portal, which is the main business of the assessee. The payment of Rs. 32 lakhs paid as non-compete fee does lead to enduring benefit as by making the payment the company has obtained an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed because the Accounts Department of the assessee company was not well organised. Before the CIT(A), all details were filed but unfortunately the CIT(A) has not at all discussed the various submissions given by the assessee. He submitted that although the details were filed before the CIT(A), the assessee, as a precaution, has also filed application for admission of additional evidence since those details were not filed before the Assessing Officer. He submitted that the matter should be restored to the file of CIT(A) for fresh adjudication of the issue in the light of the documents filed before him and in the light of the decision of Hon'ble Supreme Court in the case of G.E. Technology Cen. (P.) Ltd. v. CIT [2010] 327 ITR 456/193 Taxman 234. 10. The ld. D.R., on the other hand, submitted that the decision in the case of G.E. Technology Cen. (P.) Ltd. (supra) is not applicable to the facts of the present case. Since the assessee has not filed the requisite details before the Assessing Officer, the Assessing Officer disallowed the amount which has been upheld by the CIT(A). She submitted that the additional evidences should not be admitted at this stage since the assessee has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer treated the receipt of Rs. 9,35,780 as income of the year. He, however, disallowed the claim of Rs. 64,60,337 and added to the total income of the assessee. 14. In appeal, the CIT(A) confirmed the addition made by the Assessing Officer by holding as under : "The argument of the appellant fact of the case have been considered. In the assessment order it has been mentioned that the appellant has claimed the expenses pertaining to earlier year to the extent of Rs. 64,60,337 and the appellant has also received income relating to earlier year to the extent of Rs. 9,35,780. The appellant has adjusted these two amounts, which has not been allowed by the Assessing Officer The income pertaining to the earlier year is taxable under section 41 of the Act. While the expenses incurred for the prior period is not allowable unless it is established that the liability to pay the amount actually crystallized during the year. The Assessing Officer had provided the appellant an opportunity to explain the position. However, the appellant had not filed any documentary proof in support of its claim that the prior period expenses have crystallised during the year. Even during the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e usage expenses' of Rs. 68,45,718 had been included in disallowance of 'Software Product Development expenses' of Rs. 4,24,37,733 and if so, rectify the assessment order without appreciating the fact that under section 251(1) of the Income-tax Act the CIT(A) himself ought to have verified and quantified the relief and ought to have given direction accordingly." 2. On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the Assessing Officer to verify whether 'fixed assets' purchased by the assessee of Rs. 23,00,000 has been already capitalised by the assessee as 'Fixed assets' and if so, rectify the assessment order without appreciating the fact that under section 251(1) of the Income-tax Act the CIT(A) himself ought to have verified and quantified the relief and ought to have given direction accordingly." 18. As can be seen from the above grounds, the grievance of the revenue is that the CIT(A) has no power under section 251(1) to set aside the matter to the file of the Assessing Officer for verification. 19. Both the sides have fairly agreed that although the CIT(A) has no power to set aside the issue, however, the Tribunal has the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed. ITA No. 906/Mum/2009 (By the revenue for assessment year 2003-04) 22. The only ground raised by the revenue reads as under : "On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the Assessing Officer to revised the depreciation on Rs. 33,57,040 representing various software acquired by the assessee during the year under consideration at the rate of 60 per cent as against 25 per cent allowed as per Income-tax Rules by the Assessing Officer without appreciating the fact that rate of 60 per cent is effective only from assessment year 2004-05." 23. After hearing both the sides, we are of the considered opinion that the issue has to go back to the file of the Assessing Officer for fresh adjudication of the issue in the light of the ratio of the decision of the Special Bench of the Tribunal in the case of Amway India Enterprises (supra). Accordingly, we deem it proper to restore the issue to the file of the Assessing Officer for fresh adjudication in the light of the decision cited above and in accordance with law after providing due opportunity of being heard to the assessee. The ground of appeal raised by the revenue is accord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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