TMI Blog2015 (11) TMI 1442X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) were not before the AO. Just because AO was present at the time of proceedings before the CIT(A), we cannot say that requirements of Rule 46A of IT Rules stood satisfied. We are of the opinion that the issue therefore, requires a fresh look by the AO for verifying the allowability of the claim in accordance with law. We therefore, set aside the orders of the authorities below with regard to the allowance of interest back to the file of the AO for consideration afresh in accordance with law. - Decided in favour of revenue for statistical purposes. Disallowance of prior period expenditure - CIT(A) deleted the addition - Held that:- Grievance of the revenue is that the evidence produced by the assesssee before the CIT(A) were not before the AO. In our opinion, the question whether there was any dispute with regard to cam charges between the assessee and M/s Bharath Mall and such dispute, if it existed, whether settled, require a detailed analysis before coming to a conclusion regarding the allowability of the claim made by the assessee. Unless and until such an exercise is carried out, it cannot be ascertained whether the claim is one of prior period expenditure or business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 97.00 Rs.88,85,786.69 The tax was deducted at source on the interest paid, the same was paid on 07-06-2010. The copy of the challan is enclosed for your kind perusal . As per the assessee the unsecured loan creditors had issued a threat of withdrawing the money, unless the interest was paid. Further, as per the assessee though, the interest was calculated from an earlier period, the liability had crystallized only during the relevant previous year. Reliance was placed on the judgment of the Hon'ble Apex Court in the case of CIT Vs Swadeshi Cotton Floor Mills (P) Ltd., 53 ITR 134(SC), Himachal Pradesh High Court in the case of CIT Vs Himachal Pradesh State Forest Corpn.320 ITR 170(HP) and that of Allahabad High Court in the case of M/s Apollo Textiles Agency (2006) 283 ITR 591(All.) 5. However, the AO was not impressed by the above explanation. According to him, the loans were given by assessee's share holders and the interest payment was based on an inhouse arrangement. As per the learned AO, the assessee could not show any threat or dispute with the loan creditors. Further, as per the learned AO the judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowance. 8. Now before us, learned DR strongly assailing the order of the CIT(A) submitted that it was not a contractual liability. Assessee had never produced any contract which it had with the loan creditors that could show that there was any accrual of any interest expenditure. The claim was based on choice. No doubt, as per the learned DR, assessee had obtained letters from the loan creditors threatening withdrawal of the amounts unless the interest was paid from the date of the investments. However, as per the learned DR, this would not show that there was any legal liability on the assessee to pay the interest. Further, as per the learned DR, the copies of letters which was relied on by the learned CIT(A) for giving relief to the assessee was never before the AO. Reliance was placed on the decision of the Ahmedabad Bench of this Tribunal in the case of Cadila Pharmaceuticals Ltd Vs ACIT 25 Taxman.com 519(Ahd.) 9. Per contra, learned AR submitted that there was no fresh evidence produced by the assessee. According to her, the AO himself was present during the course of hearing before the learned CIT(A) and all the particulars were given to him for verification. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07,484/-considered by the assessee as prior period items as an allowable expenditure for the relevant previous year and had violated the provisions of Rule 46A of the IT Rules. 13. Assessee had claimed a sum of ₹ 10,07,484/- as prior period expenditure while computing its profits. The details of such prior period expenditure as furnished before the AO read as under; Distributors share ₹ 7,304,00 CAM charges ₹ 9,89,139.46 Property tax ₹ 6,594.00 Short prvi. for Bonus 2008-09 ₹ 4,447.00 Total Rs.10,07,484.46 AO required the assessee how the common amenities and maintenance charges which related to an earlier year could be allowed in the relevant previous year. Assessee replied that it was an ascertained contractual liability which accrued and crystallized during the relevant previous year. As per the assessee, there was a dispute with M/s Bharath Mall, whose premises it was using for running the theatre and such a dispute was reso ..... X X X X Extracts X X X X X X X X Extracts X X X X
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