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2014 (3) TMI 148 - HC - Income TaxClaim of deduction towards rent for the entire period between 1990 to 1997 – User rent liability towards GIDC – Held that:- There was nothing on the record to suggest that the liability for the earlier years crystallized during the year under consideration - The assessee was following mercantile system of accounting - The assessee had to account for the expenditure during the year when the liability crystallized - There was no elaboration how such liability crystallized during the period - As the Company is having mercantile accounting system, expenses are accounted on accrual basis – thus, lease rent payable to GIDC Ankleshwar/Bharuch has been accounted under Prior Period Expenses during the year - If for some reason even after laying the pipeline, the liability had not crystallized and was therefore open for the assessee to postpone the expenditure or the provision - the assessee had to demonstrate how during the current year, such liability could be claimed as having crystallized - There is nothing on the record to suggest that liability for such prior period expenses crystallized during the said period – Decided against Assessee.
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