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2012 (10) TMI 901 - HC - Income TaxWhether prior year expenditure can be adjusted against the income of the subsequent year where the assessee is following the mercantile system of accounting as per Tribunal - Held that:- given the nature of deposit maintained by the assessee and the fact that the claims from the customers were settled after protracted litigation and arbitration, the crediting and debiting of the receipts and expenses as and when the claims settled were reported in the return, which apparently required an investigation into the claims of the assessee. If the relief on the merits of the claim could be considered only through the process of reasoning, given the limited scope of Section 143(1)(a) of the Income Tax Act, which is only a prima facie adjustment on a non-debatable issue Section 143(1)(a) - revenue's appeal is rejected and order of the Tribunal is confirmed - No costs.
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