9911796707
TMI Blog2021 (8) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of prior period expenses. As held in the case of Dishman Pharmaceuticals Chemicals Ltd. [ 2019 (10) TMI 1195 - GUJARAT HIGH COURT] that once the prior period income is assessed to tax, then the corresponding prior period expenditure also should be allowed to be set off. Hence the action of the AO was contradictory to the decision rendered by Hon ble Gujarat High Court in the above said case. We notice that the assessee has offered ₹ 16,86,334/- as per the principle laid down by the Hon ble Gujarat High Court in the above said case. Thus we direct the AO to allow the prior period expenditure as deduction against prior period income. Accordingly, we direct the A.O. to delete the disallowance relating to prior period expendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the AO computed disallowance as under: Prior period Income - ₹ 1,29,28,560/- Prior Period expenses - ₹ 1,12,42,226/- - ₹ 2,41,70,786/- Less : Income offered - ₹ 16,86,334/- ₹ 2,24,84,452/- Subsequently, the A.O. noticed that the income of ₹ 16,86,334/- declared by the assessee is net of prior period income less prior period expenses, meaning thereby, the prior period income has already been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relating to a particular year is only assessed in that year. Hence the AO has to either ignore both prior period income and prior period expenditure or assess net income only. Inviting our attention to the decision rendered by Hon ble Gujarat High Court in the case of Principal CIT Vs. Dishman Pharmaceuticals Chemicals Ltd. (2019) 112 Taxmann.com 91 (Guj.), the Ld. A.R. submitted that the Hon ble Gujarat High Court has upheld the view taken by the ITAT that Once the assessee offers prior period income, then the expenditure incurred under different heads should be given set off against that income and only the net income should be added . The Ld. A.R. submitted that the assessee has already offered net income of ₹ 16,86,334/- and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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