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2012 (7) TMI 296 - AT - Income TaxPrior period expenditure - during the accounting year relevant to Assessment Year 2007-08 when the negotiations were finalized with the vendors it was found that the provision made for increase in the price of material during the accounting year relevant to assessment year 2006-07 fell short by Rs. 498.09 lacs. The same was claimed as deduction in assessment year 2007-08 – Held that:- deduction is not permissible in assessment year 2007-08, but, it is permissible in assessment year 2006-07 i.e., the year in which material was actually received from the vendors, then, the deduction can be claimed and allowed in assessment year 2006-07. Admission of additional grounds - Deduction on account of short provision for the discount to be given to dealers under sales promotion schemes - disallowed as prior period expenditure – Held that:- the additional ground is taken as an abundant precaution so as to take care of a situation that if while deciding the appeal for assessment year 2007-08 the ITAT takes the view that the deduction is not permissible in the year 2007-08, but, permissible in the year in which material was supplied or the vehicles were sold, then, the assessee should be entitled to make the claim in the relevant period i.e., assessment year 2006-07 - additional grounds admitted.
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