TMI Blog2011 (4) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessee are against the order dated 31.03.2009 passed by the Learned Commissioner of Income Tax (Appeals), Gandhinagar for the assessment year 2006-2007. 2. The various grounds raised by the Revenue are as under: "1. The ld.CIT(A) was not justified in directing the Assessing Officer to allow the assessee depreciation as per WDV method as the assessee opted for straight line method before the due date of filing of return u/s.139(1) of the Income Tax Act, 1961 and such option was final and applicable to all subsequent assessment years. 2. In view of the fact that the assessment orders in earlier years have been confirmed by the CIT(A), the ld.CIT(A) was not justified in directing the Assessing Officer to allow the ossessee's claim of depreciation as per WDV Method in the A.Y.2006-07. 3. The ld.CIT(A) was not justified in deleting the addition of Rs.19,29,184/-, made on account of earlier year expenses. 4. The ld.CIT(A) was not justified in deleting the addition of Rs.6,00,000/- made to the book profit on account of disallowance of interest expenses u/s.14A of the Income tax Act. 5. The ld. CIT(A) was not justified in deleting the addition of Rs.1,30,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view taken by the Learned Commissioner of Income Tax(Appeals) is in conformity with the decision of the Tribunal in assessee's own case for the assessment year 2002-03 (supra), we are inclined to uphold the order of the Learned Commissioner of Income Tax(Appeals). Thus, ground nos. 1 and 2 of the Revenue's appeal are rejected. 6. The facts relating to controversy involved in ground no.3 is that in the impugned order vide para 6.3 at page 8, the Learned Commissioner of Income Tax(Appeals) held that following prior period expenses should be allowed. Sr. No. Date Amount (Rs.) Particulars Justification 1. 07/07/2005 1,40,430 Purchase of Spare parts This is the amount of purchase of spares for aircompressor, some material for which was received on 14/10/2005, though the bills for the same were received before 31/12/2004. Since the material received was in the year under consideration, the liability to pay also crystallized in the year and therefore the same is deductible. 2. 22/08/2005 17,558 Amount paid to Contractor This is the amount we paid to Mr. U.P Singh which was in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts that item nos.1,2 and 4 were crystallized in the previous year, relevant to the assessment year under appeal, held that these are allowable. With regard to item no.5 i.e., services tax recovered amounting to Rs.84,126/-, the Learned Commissioner of Income Tax(Appeals), in the impugned order, accepted the plea of the assessee that the same is deductible under section 43B of the I.T. Act. The view taken by the Learned Commissioner of Income Tax(Appeals) is legally and factually correct. We, therefore, decline to interfere. Hence, ground no.3 of the Revenue's appeal is rejected. 10. With regard to controversy involved in ground nos.4,5 and 6, before the Learned Commissioner of Income Tax(Appeals), it was contended by the ld. Counsel for the assessee that while computing the book profit under section 115JB, as held by the Hon'ble Supreme Court in the case of Apollo Tyres reported in 255 ITR 273, the additions made (a) on account of disallowance u/s.14A - Rs.6,00,000/-, (b) interest on investment in bonds - Rs.1,30,000/- and (c) prior period expenses - Rs.19,29,184/- are beyond the scope of Explanation to section 115JB. Without prejudice to this, it was also contended that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer as per the directions of CIT(A) may kindly be deleted. iii) That the ld. CIT(A) erred in upholding the decision of the ld. A.O. regarding disallowance of prior period expenses Rs.12,43,335/- (Interest on public deposit Rs.9,28,335/- and paid to PWC for carbon credit assignment Rs.3,15,000/-) be deleted. iv) That the ld. CIT(A) erred in confirming the levy of interest under section 234B and recovery of interest under section 244A." 13. With regard to ground no.1 of the assessee's appeal, we have heard both the sides. In the impugned order, the Learned Commissioner of Income Tax(Appeals) held that there is no positive income, therefore assessee is not in a position to claim deduction under section 80- IA in this year. Further, if situation happens i.e. there is positive income for this year, ld. CIT(A) directed the Assessing Officer to discuss the issue of allowability of deduction under section 80IA and take into account the decision of CIT vs. Eltek SGP Ltd. before giving any conclusion. At the time of hearing, ld. Counsel of the assessee could not point out what is the infirmity in the directions given by the Learned Commissioner of Income Tax(Appeals). We, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer with the direction that he will re-work out the disallowance under section 14A, keeping in view the ratio of judgement of Hon'ble Bombay High Court in the case of Godrej Boyce Manufacturing Co. Ltd. (supra). The Assessing Officer is at liberty to consider any other decision on this issue available at the time of hearing appeal effect. 18. The facts relating to the controversy involved in ground no.3 are that in the assessment order, the Assessing Officer disallowed prior period expenses amounting to Rs.19,29,184/-. In the impugned order, vide para 6.3, the Learned Commissioner of Income Tax(Appeals) confirmed the disallowance of following prior period expenses. (1) Rs.20,276/- being wealth tax payment and hence not allowable as per section 40(a)(iia). (2) Rs.9,28,335/- being interest payable on public deposit. This amount was short provided by the appellant in the year in which be accursed. Hence cannot be claimed to have crystallized during this year, and can be charged against this year's income. (3) Rs.3,15,000/- being write off of the payment made to P.W.C. in connection with Carbon Credit assignment. Clearly, the assessee has changed the nature ..... X X X X Extracts X X X X X X X X Extracts X X X X
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