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2022 (9) TMI 1576 - HC - Income TaxNature of expenditure - Commission paid to the Managing Director - appellant company is following mercantile system of accounting and such method of accounting has been accepted by the department in all the other years - Tribunal held that the expenditure incurred can be treated as Revenue expenditure and not as capital expenditure HELD THAT:- On a careful perusal of the order of the Assessment Officer, we are of the view that the methodology adopted by the Revenue is perfectly correct for the simple reason that it is not disputed that the amount has been shown as expenditure and that the payment has been made to the Managing Director. However, the amount has been received by the beneficiary only for the subsequent Assessment Year, which does not mean that as long as the Appellant has not shown the payment in the Books of Accounts in respect of liability, it cannot be stated that the expenditure was incurred during 2004-2005 as such expenditure would be ratified only after Board's meeting. We have no other option, but to dismiss this Appeal. Accordingly, this Tax Case Appeal is dismissed and the question of law answered against the Assessee and in favour of the Revenue.
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