9911796707
TMI Blog2022 (7) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... r and confirmed by the learned CIT(A) on account of prior period expenses. 3. The assessee, in the present case, is a company which is engaged in the business of manufacturing of printed circuit boards. The return of income for the year under consideration was filed on 30.11.2015 declaring total income at Rs. Nil. The said return was selected for scrutiny through CASS and a notice under Section 143(2) of the Income-tax Act, 1961 ("the Act" in short) along with notice under Section 142(1) of the Act was issued by the Assessing Officer to the assessee. During the course of assessment proceedings, it was noticed by the Assessing Officer, on verification of the relevant expenses claimed by the assessee, that a sum to the extent of Rs.32,25,52 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o IBO Gmbh and Swift Electrocomp Solution Pvt Ltd amounting to Rs.24,87,600/- and Rs.3,12,073/- respectively you have asked to explain why the same be no disallowed considering the same as expenditure of previous year in this regard we would like to submit that it is the policy of the company since its inception that commission to the agent is to be paid after realization of sales effected through them. Sometime it also happen when amount of sales is not received, no commission is being paid to the agent. In view of this agents raise debit note in respect of commission due to them after sale is realized which was effected through them and on receipt of that debit note the same is accounted for. Under the circumstances by no stretch of imagi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bill date 31/03/2015 which comprise of secretarial work for FYs 2012-13, 2013-14 & 2014-15. In respect of professional fees also the company is accounting the expenditure as and when the bills is received and the same cannot be disallowed on the ground that it pertains to earlier year. Similarly, visit fees of Rs.39,402/- in respect of quality check of machines in earlier year and annual maintenance fees of Rs.60,379/- for period 01/01/2014 to 31/12/2014 by M/s. UL India Pvt Ltd, the bills in respect thereof received during the year be cannot be considered as previous year expenditure." 5. The Assessing Officer did not find merit in the submissions made by the assessee. According to him, the assessee-company was following the mercanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not to be claimed in the year under consideration i.e. AY 2015-16 because the same expenses have already been accounted in earlier year prior to AY 2015-16. Hence, the prior period expenses of Rs.32,25,523/- is not allowed in AY 2015-16. This ground of appeal is dismissed." 7. We have heard the arguments of both the sides on this issue and also perused the relevant material available on record. The learned Counsel for the assessee has submitted that the bills for relevant expenses on account of AMC, professional fees and quality check expenses, although related to the earlier year, were raised by the concerned parties only in the year under consideration. To substantiate this submission, learned Counsel for the assessee has invited our a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility on account of said expenses had arisen and crystallized as a result of the bills/invoices raised by the concerned parties. 9. Insofar as the sale promotion expenses of Rs.24,86,600/- and commission expenses of Rs.3,50,646/- are concerned, it is observed that the corresponding sales in respect of which the said commission was payable had been made and accounted for by the assessee in the earlier year and the commission payable in respect of the said sales was claimed as deduction in the year under consideration on the basis that the proceeds of the said sale were realized in the year under consideration. In this regard, the learned Counsel for the assessee contended that the said commission actually became payable only when the proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the case. We accordingly restrict the disallowance of Rs.32,25,523/- made by the Assessing Officer and confirmed by the learned CIT(A) on account of prior period expenses to Rs.28,37,246/-. This ground of appeal of the assessee is thus partly allowed. 10. Ground No.2 taken by the assessee in this appeal involves the issue relating to addition of Rs.3,90,431/- made by the Assessing Officer and confirmed by the learned CIT(A) on account of unutilized CENVAT and Service Tax credit written off. 11. During the course of assessment proceedings, the claim of the assessee for bad debts written off amounting to Rs.3,90,431/- was examined by the Assessing Officer. On such examination, he found that the unutilized CENVAT amounting to Rs.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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