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2016 (12) TMI 176 - ITAT MUMBAIPrior period expenses allowance - Held that:- The project was sold in the preceding year but based on the minor defects and deficiencies pointed out by the buyer during the previous year relevant to the assessment year, these expenses were incurred by the assessee during the previous year relevant to the impugned assessment year to rectify those minor defect and deficiencies pointed out by buyers and hence cannot be considered to be prior period expenses as the same were arisen, accrued and incurred in the impugned assessment year and are wholly and exclusively for the purposes of business of the assessee. In our considered view, these are not prior period expenses but have arisen, accrued and incurred during previous year relevant to impugned assessment year and are wholly and exclusively connected with the project which was already sold in March, 2008 and hence have direct and live nexus with the business carried on by the assessee. Thus, based on our detailed discussion and reasoning as set-out above, we order deletion of the additions as made by the AO and sustained by the learned CIT(A). - Decided in favour of assessee.
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