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2012 (12) TMI 632 - AT - Income TaxJurisdiction power u/s 263 by CIT(A) - interest on electricity duties, water charges and electricity duty for the AY 2006-07 & for the AY 2007-08 also considered the issue with respect to amounts charged to accounts pending finalization of the payment of salary/wages - Held that:- The issue being subjudice the assessee being governed by the Accounting Standard under the Companies Act was burdened to provide for the accrued liability when the assessee has pointed out that there was no contingent liability provided in the impugned AYs. Provision for the pay revision is provided on the basis of labourers executing the work and labour Union in the Industrial Sectors. The enhanced pay bill which will be assigned to them later can be provided for by the assessee in view of it not being contingent but accrued on the basis of services rendered by the recipients. The change or credit arisen out of a contingency which at the time of occurrence could not be estimated correctly shall not construe the correction or error and change of asset and as such, such item shall not be treated as disallowable u/s.37. The Revenue cannot take both the stands for declining to allow the prior period expenses in the impugned AYs nor consider crystallization of the liabilities provided in the impugned AYs for the AYs just because pay revision occurs every five years applicable to the respective years in accordance with the price index. Therefore, the considered view that the issues raised by the CIT have either dealt with by us in assessee’s own case or the AO in the impugned AYs against which no loss to the revenue has been pointed out on a view of the CIT alone can be considered for assuming jurisdiction u/s.263. Mere change of opinion by the CIT has to have basis of an error having been committed coupled with the fact that it was prejudicial to the interest of revenue - the orders of the CIT passed u/s.263 quashed for the impugned AYs under consideration - in favour of assessee.
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