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2015 (11) TMI 10 - AT - Income TaxAddition of prior period expenses - Held that:- the said prior period expenses are not allowable considering the system of accounting followed by the assessee. It is not the case of the assessee that the payability is crystallized during the year under consideration. After considering the facts narrated by the assessee as well as the relevant material placed before us, we are of the opinion, the conclusion drawn by the CIT (A) in this regard is fair and reasonable and it does not call for any interference - Decided against assessee. Addition of 25% of expenses of cost of production - expenses incurred in cash terming it as non-genuine - Held that:- Assessee has failed to discharge its onus in furnishing evidences in support of the cash expenses amounting to ₹ 2.01 Crs (rounded-of). We also find similar expenses were incurred in all the AYs commencing from AY 2007-08 to 2012-13 and the amount of expenses incurred vary from ₹ 2.2 Crs to ₹ 1.3 Crs in respect of the assessment years. It is also noticed that the Revenue did not make disallowance in some years and made disallowance of ₹ 5 laksh in AY 2011-2012 and ₹ 1 lakh in AY 2012-2013. It is also in the year under consideration, AO resorted to disallow 25% of the total claim and made huge addition of ₹ 50.42 lakhs. Considering the above facts, we are of the opinion that such % based ad-hocisam is not acceptable as it is without any basis. In all fairness, in our opinion, making an ad-hoc amount of ₹ 5 lakhs would meet the ends of justice. Accordingly, we direct the AO to restrict the disallowance to ₹ 5 lakhs on ad-hoc basis in order to bring the finality of the litigation on this issue as discussed in open court - Decided partly in favour of assessee.
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