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2010 (1) TMI 191 - HC - Income TaxBusiness Expenditure- the assessee had made a payment of Rs. 1,36,767 to the Bhilai Engineering Corporation in respect of certain jobs done by them from December, 1988, to June, 1989. The bills were raised by the party in the month of August, 1989. According to the assessee, as he was not aware of the actual liability on the last date of the accounting period, he claims this deduction only when the bills were submitted by the Corporation. The Assessing Officer has, however, held that as the assessee was following the mercantile system of accounting, the expenditure should have been claimed as deduction in the earlier year and not in the subsequent year and accordingly, disallowed the claim. The Commissioner of Income-tax (Appeals) confirmed the order of the Assessing Officer. However, the Tribunal held that the assessee was entitled for deduction. In the light of the decision of CIT v. Pretty cycle Industries reported in [1980] 123 ITR 227, held that- the expenditure was deductible in the assessment year 1990-91.
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