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2010 (4) TMI 886 - AT - Income TaxRejection of return - revised return u/s 139(5) – method of accounting - Assessee-company was following ‘completion method of accounting’ - During year under consideration, to match with Assessing Officer’s finding in assessment year 1983-84 onwards, assessee changed its method of accounting from ‘completion method of accounting’ to ‘percentage method of accounting’ and filed original return - assessee filed revised return on the basis of ‘completion method of accounting’ to maintain its consistency and in accordance with issue settled by Tribunal - Assessing Officer opined that a revised return could be used to correct obvious omission and mistake in the original return and it could not be used to raise an entirely new claim - He accordingly, rejected revised return and proceeded to make assessment on basis of original return - assessee filed revised return on the basis of ‘completion method of accounting’ to maintain its consistency - assessee unable to take one stand whether he should stick to their own stand to follow ‘completion method of accounting’ or to follow the Assessing Officer by following ‘percentage method of accounting’, that situation itself is sufficient to prove the bona fide of the assessee - revised return of income filed by assessee was in accordance with sub-section (5) of section 139 and, therefore, Assessing Officer was not justified in rejecting said return - in favour of the assessee Disallowance on account of administrative charges paid to HDFC as a revenue expenditure and treating the same as deferred revenue expenditure - Assessee-company paid certain amount as administrative charges on loan obtained from bank – Held that:- There was no material on record on basis of which it could be said that there was an in-built condition of liability for a number of years - it was not revenue’s case that assessee had incurred a liability to pay a larger amount than what it had borrowed at a future date - loan obtained cannot be treated as an asset or advantage for the enduring benefit of the business of the assessee. A loan is a liability and has to be repaid and, it is erroneous to consider a liability as an asset or an advantage - expenditure was made for securing the use of money for a certain period - expenditure was revenue expenditure - expenditure in question was not in the nature of capital expenditure and was laid out or expended wholly or exclusively for the purpose of the assessee’s business which is allowable expenses Capital gain - genuineness of the transaction - conversion from investment into stock-in-trade – Held that:- Genuineness of the transaction or genuineness of conversion of assets from investment to stock-in-trade which has already converted in earlier year and not during the year, cannot be examined in the year of the sale of stock-in-trade. It can be examined only in the year when the asset was acquired or converted from investment into stock-in-trade – in favor of assessee
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