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The ITO Ward-4 (1) Ahmedabad Versus Gujarat State Warehousing Corporation

2015 (7) TMI 320 - ITAT AHMEDABAD

Addition on account of non-accounting of receivable warehousing charges on accrued basis - CIT(A)deleted the addition - Held that:-.CIT(A) has decided the issue following the earlier orders for A.Y. 2003-04 and A.Y. 2004-05 wherein seen that the appellant did not receive the increase in storage rent ultimately and the godowns were vacated by the Post Master General subsequently on 31-10-2005. It was an increase made unilaterally by the appellant which was not accepted by the tenant. The increase .....

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gainst revenue.

Addition on account of prior period expenses - CIT(A)deleted the addition - Held that:- Since there is no change into the facts and circumstances of the case as the Tribunal restored this issue to the file of ld.CIT(A), therefore this year also, we deem it proper to restore this issue back to the file of ld.CIT(A) to decide the same afresh in the light of the decision of the Coordinate Bench passed [2012 (4) TMI 567 - ITAT AHMEDABAD]. - Decided in favour of revenue for .....

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f appeal:- 1. The Ld.CIT(A) has erred in law and on facts in deleting the addition of ₹ 3,16,584/- on account of non-accounting of receivable warehousing charges on accrued basis, without appreciating the fact that the assessee was following mercantile system of accounting. 2. The Ld.CIT(A) has erred in law and on facts in deleting the addition of ₹ 21,19,856/- on account of prior period expenses, without appreciating the fact that the prior period expenses claimed in the balance she .....

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) was framed vide order dated 20/11/2007, thereby the Assessing Officer (AO in short) made disallowance in respect of non-accounting of bill for warehouse charges amounting to 3,16,584/-, disallowance of prior period expenses at ₹ 21,19,856/-, disallowance of professional fees of ₹ 77,535/- and disallowance of depreciation on building and warehouse of ₹ 11,12,656/-. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A), who after considering t .....

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e order of the ld.CIT(A) and submitted that the ld.CIT(A) was not justified in deleting the addition. 3.1. On the contrary, ld.counsel for the assessee submitted that an identical disallowance was made in the earlier year by the ld.CIT(A) and the issue travelled upto the stage of the ITAT A Bench Ahmedabad and the Tribunal was pleased to delete the addition. 4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We f .....

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laterally by the appellant which was not accepted by the tenant. The increase in rent became disputed, so it cannot be held that the rent has accrued to the appellant. In view of the facts of the case as the disputed income has not been received by the appellant and the same has been written off in the F.Y. 2005-06, there is no question of accrual of additional rental income of ₹ 3,16,584/-, therefore the addition of the said amount is deleted. 4.1. From the above, it is evident that the l .....

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the hearing Ld. AR submitted that the issue is covered by the order of the Tribunal for the assessment year 2003-04 dated 17/07/09 in ITA No.837/Ahd/2006 wherein it was held as under: "In the above facts and circumstances of the case, we are of the considered opinion that under the "mercantile system" of accounting, the assessee is required to account for those income which has accrued to the assessee. An income accrued to the assessee only when it acquires a right to receive that .....

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ial before us to show that the claim made by the assessee for the revised warehousing charges was accepted at any point of time during the year under consideration by Circle Stamp Depot. In absence of such a material, the lower authorities were not justified in assuming that assessee got right to receive the remaining amount of ₹ 3,86,412/- during the year under consideration. We, therefore, set aside the order of the Id. CIT(Appeals) and direct the Assessing Officer to exclude the warehou .....

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the claim made by the assessee for the revised warehousing charges was accepted at any point of time during the year under consideration by Circle Stamp Depot. Therefore we are inclined to follow the decision rendered by the earlier bench and hold the matter in favour of the assessee. 4.2. Since no change into the facts and circumstances of the case are pointed out by the Revenue, therefore we do not see any reason to interfere with the order of the ld.CIT(A) and also not to take a contrary view .....

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ce-sheet during the year is not permissible. 5.1. On the contrary, ld.counsel for the assessee supported the order of the ld.CIT(A). 6. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the issue is decided by the ld.CIT(A) in para-4.2 of his order by observing as under:- 4.2. I have considered the submissions of the A.R.carefully. I find the explanation of the A.R. convincing. On going through the exp .....

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during the year under consideration and therefore the same is directed to be allowed in this year. 6.1. From the above finding of the ld.CIT(A), it is evident that the ld.CIT(A) has followed the order of his predecessor passed in AY 2004- 05. In AY 2004-05, the issue was carried to the Tribunal in ITA No.2901/Ahd/2008(supra) by the Revenue, wherein the Revenue has raised ground No.2 which reads as under:- 2. The Ld.CIT(A) has erred in law and on the facts of the case in deleting the disallowance .....

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not appearing in payment in previous years. However, even, if it would have been paid, the income of the assessee being exempt in the earlier years, the claim would not have been allowable OUR DECISION:- The items of payment falling U/s 43(B) of the Act shall be allowed to be claimed strictly as per the provisions stipulated in that section and not otherwise. REASONING OF AO 2. The claim of the assessee that the original bills not received is not tenable because the expenses are to be accounted .....

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