TMI Blog2011 (2) TMI 1409X X X X Extracts X X X X X X X X Extracts X X X X ..... basis and similarly income / receipt therefrom to be credited on accrual basis. 2. Whether on the facts and circumstances of the case and in law the Ld CIT(A) was justified in holding that the A.O has made the subjected addition of ₹ 64,17,476/- by preponing of income that accrued in A.Y 2005-06 when the assessee admitted that an amount of ₹ 64,17,476/- (53,17,206 + 43B ₹ 11,00,270/-) pertained to A.Y 2004-05. 3. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) provisions made towards the raw material / component purchase whereas the Ld. CIT(A) has co-terminus powers with that of the Assessing Officer to ascertain the facts or call upon the Assessing Officer to verify the facts. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee have raised bills in F.Y. 2004-05, the parties who had supplied raw material to the assessee had also raised the bills in F.Y. 2004-05. (iv) Whatsoever Accounting Standards or accounting principles, the assessee is following, there cannot be post ponement of taxable income. There cannot be debit in one year and consequent credit in subsequent year. 3. During the first appellate proceedings, the assessee made submissions stating that difference in price rise was the result of the rigorous negotiations over a period of time and the same was finally realized only in May 2004 relevant for the A.Y 2005-06. The CIT(A) accepted the contention of the assessee and granted a relief to the assessee. Aggrieved with the same, Revenue is b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time the customers of the assessee agreed to the enhanced terms of payment and revised the purchase orders. Since the amended purchase orders were raised in the F.Y. 2004-05, the enforceable right to receive the enhanced price and therefore, accrual of corresponding income also arose in the A.Y 2005-06 and not in the year under consideration. As such, there is no question of assessing the income of ₹ 64,17,476/- in the A.Y. 2004-05. 5.6 I also do not find any force in the action of the Assessing Office in taxing the income of ₹ 64,17,476/- in this year on the ground that there cannot be debit in one year and consequent credit in subsequent year. In case of a conflict between the matching principle and principle of accr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debited an amount of ₹ 18,05,370/- being provision for open GRNS (goods receipts notes) on finding that assessee made actual payment of only ₹ 14,49,096/- and assessee has not paid balance of ₹ 3,56,274/- . A.O disallowed the said amount of ₹ 3,56,274/- being an excess provision made for open GRNS. CIT(A) gave relief to the assessee on finding that the said amount pertained to 3 to 4 parties in whose names such amounts are shown outstanding and the parties are identifiable. Other reasoning of the CIT(A) in this regard is given in para 6.5 of the impugned order, the same reads as under:- 6.5 The submission has been considered and is found to have merit. It is not the case of the Assessing Officer that the liabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the ordinary course of its business from identified suppliers. 2. The said amount has neither been written back by the assessee nor waived by the suppliers and therefore there is no remission or cessation of liability. Assessee has not received any benefit there from. Merely because the liability has remained unpaid it does not constitute income in the hands of the assessee. Reliance is placed on the favourable decision of Hon ble Punjab Haryana High Court in the case of GP International Ltd. 186 Taxman 229. 10. During the proceedings before us, both parties relied on their respective strands. Even after hearing the parties, from the above facts, it is not clear as to whether ₹ 3,56,274/- is an excess provision cred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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