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2016 (1) TMI 1172 - HC - Income TaxProvision in respect of a percentage of sale to account for various expenses transferred to a separate account - allowable expenditure - Held that:- ITAT being a last fact finding authority has held that all these ingredients which goes to the recognition of provision are satisfied and as such, there is no need to remit the matter back to the Assessing Officer. In such circumstances, we do not see any ground made out by the revenue to remand the matter back to the Assessing Officer. The claim of expenditure being consistent with the method of accounting followed and the provision has been made on concluded transactions, the order of the Assessing Officer is held to be incorrect. We do not see any reason to differ from this view, which is in accordance with Section 145 of the Act. Disallowance of loss - assessee was making various inter unit transfers, it was necessary to examine the entries which were not recorded properly in the first instance - Held that:- We do not see any flaw in the order passed by the ITAT for the reason that the Assessing Officer himself while deciding the issue in question has accepted the auditor's certificate for the assessment year 2003-04 and has categorically held that such a certificate of the Chartered Accountant would have been suffice to accept the claim of the assessee towards the adjustment entries for prior period expenses. In such view of the matter, the assessee has cured the defects pointed out by the Assessing Officer, by filing the necessary auditor's report before the CIT which was properly considered and held that it was a genuine error in the book entry and the same is confirmed by the ITAT which in our opinion is justifiable. We are not inclined to interfere with the factual findings given by the authorities regarding the genuiness of the adjustments in the book entry. It is settled law that the no income can arise by mere book entries (vide Kedarnath Jute Manufacturing Co. Ltd. vs CIT (Central), Calcutta - 1971 (8) TMI 10 - SUPREME Court ).
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