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2024 (1) TMI 1233 - BOMBAY HIGH COURTReopening of assessment - reason to believe - disallowance prior period of expenses - revenue submitted that when petitioner is following the mercantile system of accounting, prior period expenses claimed in profit and loss account is not allowable and that issue has been taken by the AO for a later year and that would be a fresh tangible material - HELD THAT:- We would agree with Petitioner that if the basis for reopening to disallow prior period of expenses was the assessment order for AY-2010- 2011, that assessment order for AY-2010-2011 having been set aside by CIT(A) in his order dated 18th February 2015 and Revenue having accepted the order, it cannot be said that there was any tangible material to reopen the assessment for AY 2008-2009. Moreover, as decided by this court [2011 (7) TMI 1210 - BOMBAY HIGH COURT] one of the question of law raised was whether the ITAT was justified in deleting the disallowance on account of prior period expenses which did not pertain to the year under consideration when the assessee was following mercantile system of accounting. The court was pleased to hold that the expenditure would be allowable. In the affidavit in reply, none of the averments in the petition has been specifically denied, save and except, it states that the notice has been issued after obtaining prior permission of the concerned authority. Thus in view of the above, we are satisfied that the reopening cannot be sustained. Assessee appeal allowed.
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