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2017 (5) TMI 1718 - AT - Income TaxDisallowance on account of non-reconciliation of provision for Gratuity - addition on account of unpaid sales tax under section 43B - Addition of unpaid bonus u/s 43B - HELD THAT:- These grounds concern certain disallowances by the Assessing Officer (AO) which were assailed before the CIT(A). On going through the order of the CIT(A), we notice that the CIT(A) has granted relief to the assessee subject to verification of attendant facts governing the issues involved as per these grounds. We find that the action of the CIT(A) is just and proper as warranted in the circumstances of the case and cannot be faulted. Thus, we do not see any merit in the grievances raised by the assessee as per Ground Nos.1 to 3 of its appeal. Resultantly, Ground Nos.1, 2 & 3 are dismissed. Disallowance of prior period expenses - disallowance has been made on the ground that the expenses under various heads as noted in the assessment order pertained to earlier years and the assessee which is following system of accounting should have made provision for expenses in those respective years and claimed them as deduction - HELD THAT:- Assessee is a State Government Undertaking and its accounts are subjected to review by CAG and therefore it cannot be postulated that there was any deliberateness in not furnishing relevant details before the revenue authorities. The bonafides of the Assessee is also augmented by the facts that the Assessee has reported staggering carry forward losses in its returned income. Thus, there is no immediate tax advantage accrued to the assessee by the claim of impugned prior period expenses per se. We therefore deem it expedient to restore the issue back to the file of AO for examining the issue de novo after verifying facts as may be considered necessary and expedient in accordance with law. The AO shall bear in mind the ratio laid down by the Hon’ble Gujarat High Court in the case of Adani Enterprises Ltd. [2016 (7) TMI 1564 - GUJARAT HIGH COURT] while adjudicating the issue. Needless to say, reasonable opportunity shall be provided to the assessee while adjudicating the issue. Hence, all the contentions of the assessee are kept open. Ground No.4 is allowed for statistical purposes.
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