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2021 (6) TMI 235 - AT - Income TaxDisallowance of prior period interest expenses which relates to work-in-progress - assessee pleaded that it had not claimed any expenditure or deduction towards the said prior period interest and that the same has only been debited to work-in-progress - HELD THAT:- Admittedly, this interest expense though pertains to AY 2012-13 was never claimed as deduction by the assessee. If due provision has been made on mercantile basis then the same would have got included in the opening work-in-progress and the opening work-in-progress thereon would have increased byinterest expenses. Since no provision was made by the assessee in AY 2012-13 for this interest expense, it was not included in the opening work-in-progress. As assessee had included the same in the closing work-in-progress in AY 2012-13. Hence this is a clear case of omission of booking an expenditure to the closing work in progress, which was rectified during the year under consideration. In any case, we find that assessee has not claimed any deduction for the same warranting any disallowance. Hence, we also find that assessee has furnished Profit & Loss Account for the year ended on 31.03.2013 without interest expenses and with interest expenses to drive home the point that loss for the year remains the same in both the scenario. As safely concluded that loss for the year continues to remain the same and hence the contention of the assessee that it had not claimed any deduction in the return of income for the AY 2013-14 towards prior period interest deserves to be accepted and accordingly the grounds raised by the assessee are allowed.
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