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TMI Blog2013 (6) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... le. 3. The Learned CIT(A) has further erred in disallowing expenditure alleged to be pertaining to prior periods amounting to Rs. 2,18,88,281. 3.1.Without prejudice to the generality, the learned CIT (A) has erred in not directing the AO to give appropriate effect in the assessment for A Y 2000-01 in which year, the remission of the said expenditure to the expenditure of Rs. 1,34,93,692/- has been assessed to tax. 3.2Without fruther prejudice, the CIT (A) has erred in not allowing expenses of Rs. 49,26,257/- which in anyway crystallized during the year under appeal. Your appellant craves leaves to add or amend or alter the above grounds, if necessary." Grounds of appeal filed by the AO read as under: "(1)"On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the AO to allow depreciation of Rs.17,36,32,555/- on undersea 'FLAG' cable system." (2)"On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the AO to allow deduction of Rs.3,37,151/- being expenses incurred in respect of earlier years." The appellant prays that the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal Representative (DR) supported the orders of the AO and the FAA. We have heard the rival submissions and perused the material on record. It is found that F Bench of the ITAT, Mumbai vide its order 05.12.2012(supra) has dealt the issue as under: "3. Ground No.2 relates to the disallowance of deduction claimed under section 35D of the Act in respect of amortization of preliminary expenses. Counsel for the assessee pointed out that the claim of the assessee has been allowed by the Revenue from assessment year 2000-200 1 by which the Revenue has taken the view that assessment year 2000-200 1 is the first year of eligibility.On that view of the matter, the issue involved in this ground of appeal become otiose and the Counsel fairly submitted that he is not pressing this ground of appeal. Ground No.2 is accordingly dismissed." Following the above order we dismiss the Ground No.1 filed by the assessee. 4. Next Ground of appeal is about the claim made u/s.80IA amounting to Rs.4,12,37,88,812/- by the assessee in respect of eligible undertakings viz.,Earth Stations, Internet and Inmarsat M&B services. During the assessment proceedings AO held that the method adopted by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee in respect of earlier years for which invoices were received during the year. Thus, AO made a total disallowance of Rs.2.22 Crores. 5.1. Assessee preferred an appeal before the FAA. After considering the submissions of the assessee he held that expenditure amounting to Rs.3.37 lacs should be allowed. He held that Rs.3.37 lacs pertained to two items - Rs.1.46 lacs and Rs.1.90 lacs, that out of it invoice of Rs.1.46 lacs was received during the year though expenditure was of earlier year, that expenditure of Rs.1.90 lacs; related to earlier year; was also incurred in the year under consideration, that invoice for the restoration charges for APC Cable was received in AY.1999-2000. He directed the AO to allow both these items. For the balance amount of Rs.2.18 Crores FAA confirmed the action of the AO. He was of the opinion that actual expenditure had not taken place. 5.2. Before us, AR submitted that there was no need for adjudicating issue of prior period expenses amounting to Rs.1.48 Crores (Rs.1,34,93,692/- + Rs.14,74,104/-) as same was taken care in subsequent year. He further submitted that bills for the balance amount i.e.69.2 lacs(Rs. 49,26,257/- and Rs.19,94,228/-) we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o a period of 1st November 1963 to 11th December 1973, deduction was admissible for A.Y.1996-97. Applying the proposition laid down in these case laws to the facts of the case we hold that such bills were received during the current financial year. The First Appellate Authority has rightly held that the expenditure crystallised during the year and hence was rightly claimed during the year. Thus, we dismiss ground No 2,3 & 4 of the revenue ." From the records available it is found that out of prior period expenditure 2.18 crores bill amounting to Rs. 69.20 lakhs (49.206 lakhs + 19.94 lakhs) were received before the due date of approval of accounts. As the liability crystallisation took place during the year under consideration, so in our opinion same should be allowed. Following the order for the AY.1997-98 of the F Bench of Mumbai Tribunal (supra), we allow prior period expenses of Rs.69.20 lacs out of the total disallowance (2.18 Crores) confirmed by the FAA, Ground No.3 is partly decided in favour of the assessee. As a result appeal filed by the assessee stands partly allowed. ITA No. 3748/M/06-AY.1999-2000 : 6. In the appeal filed by the AO first Ground of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the indefeasible rights and such claim of the appellant has been wrongly denied by the Assessing Officer.The Assessing Officer is therefore directed to work out the exact amount of depreciation allowable to the appellant.....". Tribunal confirmed the order of the FAA and held as under: "Learned Counsel of the assessee pointed out that the revenue has been allowing depreciation in the subsequent year and principles of consistency should be followed as per the ratio of the judgment of Hon'ble Delhi High. Court in the case of CIT Vs. Dalmia Promoters P. Ltd. 281 ITR 346 (Del). Learned Departmental Representative was not able to factually contradict that the claim of the assessee that it is a Member of International Consortium that owned the cables and that it is a part owner, with the right to transfer its share to other and also a right to share the sale proceed on decommissioning of the system, in proportion to the rights held by it. When these facts are not in dispute, we are no hesitation in upholding the order of the first appellate authority and dismissing ground No. 5 of the revenue As the issue is covered in favour of the assessee in the earlier AYs. So, res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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