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TMI Blog2018 (1) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... ounds of appeal related to the prior period expenses which were claimed by the assessee and the assessing officer (AO) made the addition. 1. The order of the Ld. CIT(A)-1, Visakhapatnam is erroneous on the facts of the case and in law 2. The Ld. CIT(A) erred in deleting the entire addition of Rs. 382.76 lakhs made by the Assessing Officer on account of disallowance of prior period expenses on the ground that the amount in fact represents prior period income and not prior period expenses. 3. The Ld. CIT(A) ought to have upheld the action of the Assessing Officer in disallowing prior period expenses to the extent of Rs. 3 1.39 lakhs, which was adjusted against prior period income of Rs. 382.76 lakhs and the net prior period income was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible reduction and required to be claimed as reduction in the year in which it was accrued the AO made the disallowance of Rs. 382.76 lakhs and added back to the returned loss of the assessee. Aggrieved by the order of the AO, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) deleted the addition holding that the company itself has taken net credit of Rs. 351.37 lakhs and the company has considered both the prior period income as well as the prior period expenses in the year under consideration, hence, directed the AO to delete the addition. 3. Aggrieved by the order of the CIT(A), the revenue filed appeal before the Tribunal. During the appeal hearing, the Ld.DR argued that the prior period expenses are not allowable in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 0 Other expenses 35.49 Interest 246.7 Total 31.39 lakhs 382.76 lakhs 4.3.1. Thus from the above it can be seen that there is net income out of the prior period adjustments. However, the AO added the same which resulted in taxing the same amount twice / adding the same item twice. Assessee in this regard placed reliance on the Hon'ble jurisdictional Tribunal decision in the case of M/s.Hindustan Shipyard Ltd, Visakhapatnam in ITA No.21/Vizag/2006 dtd.10.02.2011 wherein it is held that once the AO has accepted prior period income it is not proper on his part to disallow the prior period expenditure as he has to take into the account the status as a whole and not to make a pick and choose. The relevant por ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tnam Bench in its order No.106/Vizag/2012 dated 05.03.2014 for the assessment year 2007-08 dismissed the appeal of the revenue on the same issue. For ready reference, we extract the relevant paragraph of the order of the Hon'ble ITAT as under. "The Ld.CIT(A) has erred in deleting the addition made on account of prior period expenditure in as much as an appeal wasfiled on this issue before Honourable High Court of Andhra Pradesh in the assessee's case for AY2002-03." 2. After hearing rival contentions on a plain reading of the ground, we find that grievance of the Revenue is against the decision of the Tribunal in assessee's case for the earlier assessment year, which is disputed by it in the High Court, h a ground cannot be counten ..... X X X X Extracts X X X X X X X X Extracts X X X X
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