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2022 (3) TMI 477 - AT - Income TaxDisallowance on account of payment of octroi expenses - HELD THAT:- There is no dispute that the impugned liability pertains to F.Ys. 2011-12 and 2012-13. A perusal of the documents shows that though the assessee made several attempts of paying the same, but the Brihan Mumbai Mahanagar Palika returned the demand draft, as further investigation was going on in respect of the liability. Finally, liability was settled and the assessee made a payment. There is no dispute that the entire liability was discharged before filing return of income for the year under consideration. On perusal of the facts, we are of the considered opinion that since the liability of F.Ys. 2011-12 and 2012-13 crystallized during the Assessment Year under consideration, the same has to be allowed. We, accordingly, direct the Assessing Officer to allow the claim - Addition is, accordingly, deleted. Ground Nos. 1, 2 and 3 are allowed. Assessee received incentives/benefits from lessors - HELD THAT:- There is no dispute that the assessee has received incentives from the lessors - It is also not in dispute that the assessee has amortized in the profit and loss account only ₹ 34,05,526/- and balance has been spread over the entire lease period. Assessee is following the mercantile system of accounting and, therefore, was required to recognize all revenue receipts as income in the year of accrual. Lease agreement clearly indicates that the assessee is entitled to receive lease incentives at the time of the delivery of space/opening of stores which means that the right to receive the lease incentives accrued to the assessee at the beginning of the lease. Even in the lease agreement, there is nothing to show that the incentives accrued yearly. In fact, the assessee is not under any obligation to refund any part of the incentive to the lessor in case the lease is terminated before the completion of lease period. This also shows that the amount of incentive does not accrue yearly during the lease period. The findings of the Assessing Officer/ld. CIT(A) cannot be faulted with. Therefore, no interference is called for. Ground Nos. 4 and 5 are, accordingly, dismissed.
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