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TMI Blog2017 (9) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... 3/08/2015, assessee had clarified that the provision figures that were submitted during the assessment proceedings (and which were picked by CIT in the revision proceedings) were actually month end provision figures and not the provision figures which were outstanding at the year end. It is clear that as per the revised provision figures in respect of rent, utilities and office maintenance, the total provision outstanding as at the year-end is INR 2,85,917/- and not ₹ 1,23,09,109/- taken by CIT in his order u/s.263. We accordingly modify the order of CIT and direct the AO to verify the said provision of ₹ 2,85,917/- as been claimed to be subsequently paid / adjusted in the subsequent year i.e. A.Y. 2013-14. If the AO found th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lectricity and office maintenance expenses during the financial year 2011-12 relevant to A. Y. 2012-13. 6) The learned Principal Commissioner of Income Tax ought to have considered that the provision for above expenses which is outstanding as on 31 SI March, 2012 was ₹ 2,85,917/-, the breakup of which is as under: Account Head Provision for Expenses (Rs.) Rent 2,62,945/- Utilities 1 Electricity Charges NIL Office Maintenance Charges 22,972/- Total 2,85,917/- 7) The learned Principal Commissioner of Income Tax erred i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Ld. CIT also stated that from the details filed regarding the other expenses, the amounts of ₹ 26,08,116/- ₹ 75,46,369/- and ₹ 21,54,654/- have been debited under the head provisions for rent, provision for electricity charges and provision for maintenance. Since, the above amounts represent only provisions they cannot be allowed a deduction as liability for the same cannot be said to have accrued. 5. With regard to the computation of income available on record, CIT observed that the licensee fee for the A.Y 2012-13 has been claimed to the extent of ₹ 1,22,01,914/- being 100% from the assessment order passed by the A.O for the A.Y 2011-12, it was held by the A.O that the license fee is only capital expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge 26 of the paper book giving break-up of such accrued expenses of ₹ 60,80,813/-, wherein outstanding rent was only ₹ 2,62,945/- as against outstanding rent considered by CIT at ₹ 26,08,116/-. As per the list of accrued expenses, there was no provision for electricity expenses and maintenance expenses. 9. In view of the above, it was vehemently argued by learned AR that CIT has wrongly taken provision for expenses which were not at all claimed in the P L Account so as to reduce the profit. He submitted that CIT has not applied his mind at all to the statements filed before him explaining each and every item asked by him in his notice u/s.263. 10. Learned AR contended that while passing scrutiny order u/s.143(3), t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tually month end provision figures and not the provision figures which were outstanding at the year end. 13. In view of the above, revised figures of provision, in respect of the above-referred expenses, as at the year-end, as appearing in the balance sheet, for the subject AY along with the manner in which they were paid/settled, in the subsequent years are as under: Provision for rent - INR 2,62,945 Provision for electricity - INR Nil Provision for maintenance - INR 22,972 14. Thus, it is clear that as per the revised provision figures in respect of rent, utiliti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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