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2017 (10) TMI 1577 - AT - Income TaxAddition on account of prior period expenses - HELD THAT:- The assessee is a government organization following the mercantile system of accounting where the expenses are recognized only when they are crystallized. It was further stated that these expenditure have been crystallized during the year and therefore there been accounted so. Assessee is also explained various reason why the expenditure have been crystallized during the year such as receipt of claim from subcontractors a later date when the work was duly carried out in completed in earlier years, acceptance of additional claims, receipt of invoices of materials and later date, measurement of work done by the client after the closing of the accounts, staff salary payments revision of pay structures etc with retrospective effect. The identical issue arose in the case of the assessee wherein for assessment year 2006 2007 the Ld. CIT appeal has allowed the claim of the assessee relying upon the decision in case of Saurashtra cement and chemicals industries Ltd versus CIT [1994 (10) TMI 30 - GUJARAT HIGH COURT]. DR could not controvert the findings of the CIT appeal as well as could not place before us any reason that the expenditure has not been crystallized during the year. - Decided against revenue.
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