Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (7) TMI 275 - AT - Income TaxDisallowance of Customs Duty paid as prior period expenses - assessee could not perform the obligation of export and accordingly, claimed the sum so paid as prior period items - AO disallowed the same on the ground that the expenditure was not related to previous year - HELD THAT:- The expenditure has been crystallized only during this year. The incentive received in earlier year as been considered as income in earlier years. In this year, the assessee could not perform export obligation and accordingly, held liable to pay the said amount. Therefore, the deduction of the same is allowable to the assessee. The corresponding grounds stands allowed. Disallowance of Deferred Revenue Expenditure - Due to severe technical issues, the expenditure incurred on raw material, power and consumable etc. during the intervening period between the date the project was ready to commence commercial production and the date on which commercial production actually began was treated as deferred revenue expenditure in the books of account and same was written-off over a period of 5 years - HELD THAT:- From the computation of income of subsequent years as placed on record, it could be seen that the expenditure in those years has been reversed in the computation of income and the deduction of the same has not been claimed by the assessee. The action of the assessee is in accordance with the decision of Taparia Tools Ltd. [2015 (3) TMI 853 - SUPREME COURT] which held that when a particular course of action was permissible in law to the assessee as it was in consonance with the provisions of the Act which permits the assessee to claim the expenditure in the year in which it was incurred, merely because a different treatment was given in the books of account cannot be a factor which would deprive the assessee from claiming the entire expenditure as a deduction. The entries in the books of account are not determinative or conclusive and the matter is to be examined on the touchstone of provisions contained in the Act. Deduction of the expenditure, in full, could have been claimed by the assessee in the first year itself. Since the assessee has not furnished complete details of the expenditure, we restore the matter back to the file of AO with a direction to the assessee to furnish the details of the expenditure. If the same is found to be revenue in nature, the deduction of the same would be available in full. The corresponding ground stand allowed for statistical purposes.
|