Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2017 (11) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (11) TMI 1420 - HC - Income TaxAssessment of income - assessee has received the amount of Arbitration Award and has disclosed only the net profit on these receipts by applying the NP rate - Mercantile system of accounting - contingent liability - subsequent years expenses which are claimed ought not to be allowed in the relevant year - Held that:- From the record it is very clear that the assessee while submitting his credential before the AO relied on the audit report for the A.Y. 1990-91 & 1993-94 which he alleged to have not claimed expenses. However, no finding has been arrived by the AO and if we look at the average which has been applied by the AO and tribunal, the same are not consistent. In that view of the matter, we are of the opinion that while considering the statement for A.Y. 1990-91 & 1993-94, the AO ought not to have been given finding whether the expenses are claimed or not instead of deciding the issue which is not relevant and simply deducted the amount which is claimed in the income. In our considered opinion, CIT while considering the same has rightly held the profit rate and allowed the claim of the appellant as reproduced hereinabove. The tribunal has committed serious error in concluding that subsequent years expenses which are claimed ought not to be allowed in the relevant year . In view thereof, the income which has been incurred in the year 2006-07 is required to be allowed as expenses were not claimed in the earlier year. Since, no finding arrived by the AO whether the expenses are claimed or not for the A.Y. 2004-05. - Decided in favour of the assessee
|