9911796707
TMI Blog2011 (3) TMI 1808X X X X Extracts X X X X X X X X Extracts X X X X ..... e said liability for expenses was actually crystallized during the current assessment year and hence, were allowable. 2. Without prejudice to the above and on the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) erred in not giving a direction that the above expenses should be allowed in the relevant assessment year. 2. The assessee is a company engaged in the business of import and trading of chemicals. The AO noticed that clause 22(b) of the Tax Audit Report furnished in form No.3CD and filed along with return of income it has been mentioned that a sum of ₹ 4,90,314/- was debited to P L Account on account of prior period expenditure. Since the expenditure was not incurred during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income . 1,35,692 Survey fee . 76,891 Transportation . 60,000 Clearing charges . 50,472 Wharfage . 20,800 4,90,314 Profits Loss account: Income under various head 234,79,16,880 Expenses under various heads . 242,10,97,248 Prof. or loss for the year --- (-) 7,31,80,368 Prior period transactions 4,90,314 Profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for the year under consideration. Since, the same was crystallized /accrued during the year. Thus, the appellant was not justified in debiting prior period income of ₹ 4,90,314/- in the P L Account. The addition / disallowance of ₹ 4,90,314/- made by the AO is therefore, confirmed though for different reasons. This ground of appeal is dismissed. 4. Aggrieved by the order of the CIT(A) the assessee has raised Ground No.1 2 before the Tribunal. 5. The ld. Counsel for the assessee submitted that the conclusions of the CIT(A) are erroneous. In this regard he brought to our attention to Schedule 14 of prior period items of the P L Account and submitted that the expenses were more and the income was less and difference was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irect the AO to allow the expenses in the relevant assessment year. Ground No.1 is therefore, dismissed while ground No.2 is allowed. 7. Ground No.3 raised by the assessee reads as follows: 3. On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) erred in upholding the disallowance of depreciation of ₹ 76,300/- on account of nonITA deduction of TDS on the additions made to the asset during the relevant assessment year, under the provisions of section 40(a) (ia). 8. On perusal of Annexure -8 of Form No.3CD, it was noticed by the AO that a sum of ₹ 15,26,000/- has been reported as expenditure of capital in nature on which no tax has been deducted and ₹ 4,16,544/- is re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal 1,07,541 9. On appeal by the assessee the CIT(A) confirmed the disallowance of depreciation to the extent of ₹ 76,300/- being depreciation on capital expenditure incurred by the assessee of ₹ 15,26,000/-. 10. Aggrieved by the order of the CIT(A) the assessee has raised Ground No.3 before the Tribunal. We have heard the rival submissions. Provisions of section 40(ia) of the Income Tax Act, 1961 (the Act) reads as follows: 40. Notwithstanding anything to the contrary in section 30 to[38], the following amounts shall not be deducted in computing the income chargeable under the head Profits and gains of business or profession , (ia) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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