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2020 (10) TMI 79 - AT - Income TaxDisallowance of provision for professional cost - Non adoption of consistent accounting principle - whether the above provision represents the liability incurred for the period and hence is an allowable deduction? - HELD THAT:- A perusal of the audited account of the company shows that the assessee had a huge loss in the immediately preceding assessment year and probably for this reason the assessee had not made any provision for professional cost. As during the current year such loss has substantially reduced and in the subsequent years assessee has started showing income. No merit in the arguments of the Ld. Counsel for the assessee that inadvertently owing to clerical error no provision was made in financial year 2008-09 relevant to assessment year 2009-10. Accounts of the company are audited by reputed CA firm and therefore it cannot be said that it is an inadvertent error. Even if the same is considered as an inadvertent error, the assessee has not taken any step to revise the return of income. Therefore, we fully concur with the findings of the Ld. CIT(A) that assessee has not adopted consistent accounting principle on year to year basis and it is not open to the assessee to claim the expense on provision basis in one year and on accrual basis in the other year. As the assessee is not adopting consistent accounting principle on year to year basis. No infirmity in the order of the Ld. CIT(A) confirming the disallowance made by the AO - Decided against assessee.
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