TMI Blog2014 (3) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is getting taxed in the year, it is required to be excluded from the total income in the succeeding year since, under the scheme of Act, double taxation of same income is not permissible – Decided partly in favour of Assessee. - I.T.A. No. 7777/Mum/2011 - - - Dated:- 21-2-2014 - Shri B. R. Mittal, JM And Shri B. R. Baskaran, AM,JJ. For the Appellant : Shri Yogesh Thar For the Respondent : Shri Pitamba Das ORDER Per B. R. Baskaran, AM. The appeal filed by the assessee is directed against the order dated 25.8.2011 passed by the ld CIT(A)-I, Mumbai and it relates to the AY 2004-05. 2. Following two issues are urged in this appeal. (a) Validity of reopening of the assessment (b) Correctness of disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng reliance on the decision of the Hon ble Madras High Court in the case of CIT Vs. Indian Overseas Bank (151 ITR 446), the AO took the view that the provision made in the accounts for an accrued or known liability alone is admissible as deduction under the Act.. Since, the AO took the view that the Miscellaneous provision made by the assessee towards the difference in the collection account of various schemes do not fall in the category of an accrued or loan liability, he disallowed the claim of Rs.30.00 lacs made by the assessee. The ld CIT(A) has also confirmed the said addition. 5. The ld counsel for the assessee submitted that the assessee, being an Asset Management Company, is required to borne expenses incurred by the mutual fun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted by the Ld D.R, we notice from the copy of annual report filed before us that the assessee did not claim miscellaneous provision in the immediately preceding year. Further, we notice that the assessee has appended a note in the annual report clarifying that the miscellaneous provision represents the difference in the collection account of the various schemes . According to Ld A.R, the assessee is required to incur the expenditure towards brokerage and marketing expenses related to various schemes of mutual funds. According to Ld A.R, the details of expenditure incurred by the mutual funds, which is required to be refunded to them, will be known to the assessee only on receipt of accounts from the mutual funds. Hence, according to Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of: Ch.No. direct-HSBC Mutual Fund payment to HSBC Mutual Fund towards reconciliation difference arising in the books as on 31 Mar 04 Amount (in words) Rs. Twenty two lakh eighty one thousands seven hundred seven only) Rs. 22,81,707.00 9. We notice that the narration given in the voucher clearly states that the payment of Rs.22,81,707/- pertain to the year ending 31.3.2004, i.e., the year under consideration. Since the above said amount was disbursed before the date of finalization of accounts for the year under consideration, the bench expressed the view that the claim of Rs.30.00 lakhs made in this year may be restricted to the actual amount of Rs.22,81,707/-. The Ld A.R fairly agreed with the view expressed by the bench. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e after due examination of the transactions relating to its payment. Accordingly, we set aside the order of the Ld CIT(A) on this issue and restore the same to the file of the assessing officer with the direction to allow the claim to the extent of Rs.22,81,707/- after satisfying himself about the claim of payment made in the succeeding year. 12. According to the assessee, the balance amount of Rs.7,18,293/- has already been offered as income in the succeeding year. Since the very same amount is getting taxed in this year, it is required to be excluded from the total income in the succeeding year since, under the scheme of Act, double taxation of same income is not permissible. In this regard, the assessee may move the assessing officer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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