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2010 (9) TMI 36 - HC - Income TaxBusiness Expenditure - The respondent- assessee filed a return declaring a loss of Rs. 3.81 crores. The appeal filed by the assessee against order of the Assessing Officer before the Commissioner (Appeals) was allowed. The Tribunal held that the assessee itself could not have known about liability in the earlier assessment year and the liability of the assessee under the agreement had arisen and accrued in August 2002, when the agreement was executed. It was under the agreement that the liability to pay for the period January 2002 to March 2002 arose. Thus, the assessee could only have claimed the liability as expenditure in assessment year 2003-04. Held that - if the assessee had shown the prior period income and the Assessing officer had not excluded it while working out the current year's taxable income then there was no reason on part of the Assessing Officer to disallow only one part of the prior period adjustment. The addition made by Assessing Officer could not be sustained.
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