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2016 (2) TMI 697 - ITAT DELHI

2016 (2) TMI 697 - ITAT DELHI - TMI - Prior period adjustments- Held that:- We have observed that the assessee had already claim depreciation allowances over the period and has claimed interest expenses either in a capitalized form or in Revenue form on the asset against the liability existent. The said liability no longer remains during the year under consideration. In fact the expenses was also claimed during the past years. The submission made by the assessee before the Assessing Officer that .....

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l is filed by the assessee against order dated 5/12/2012 passed by Ld. CIT(A) XVII, New Delhi. 2. During the course of hearing, concise grounds of appeal are filed by the AR which are reproduced herein below: 1. On the facts and circumstances of the case, the order passed by the Ld. Commissioner of Income Tax [(CIT)] is bad, both in the eye of law and on the facts and against the principle of natural justice. 2. On the facts and circumstances of the case, the Ld. CIT(A) has erred, both on facts .....

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5JB of the Income Tax Act representing principal amount of loan for purchase of Plant and Machinery waived by the bank transferred during F.Y 2008-09 from capital reserve account to Profit & Loss Account. 3. The assessee company is engaged in the running of nursing home cum lithotripsy and laproscopic centers. The assessee filed its return of income for the assessment year under consideration on 30/9/2009 declaring a loss of ₹ 5,85,83,476/- and subsequently filed revised returns on 8/1 .....

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unt credited to the P&L A/c as profit before tax and added ₹ 3,41,25,895/- to the income of the assessee. The Assessing Officer further held as under: 3.4.2 It is seen that the assessee has credited the above income as prior period income and has not offered the same u/s 115JB of the I.T. Act, 1961 as well. The Clause (i) only allows for the above amount to be reduced from Book Profit if the said amount has been offered for tax in the earlier year. The assessee has not explained as to .....

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principle loan amount of ₹ 3,41,25,895/-, being the waiver amount has been transferred to Capital Reserve in the year 1998. Therefore, this amount has been directly taken to reserves and has never been an item of the P & L Account for the earlier years under consideration. Therefore, it is very clear that the same has never been offered for tax. In view of the same, as per clause (i) for the sums to be reduced from Book Profit, the above amount does not qualify at all. Therefore, the .....

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fit & Loss Account can be claimed as exempt. Thus the addition made by the Assessing Officer was upheld by the CIT(A). 5. The AR submitted that the assessee company is Ravi Hospitals and Nursing Homes. During the year 1987-88, the assessee acquired lithotripsy machine through loans obtained from M/s Barclays Bank. There was a steep increase in the currency rates and, therefore, the payments were made by the Bank of India under DPJ. Since, the payments made by the Bank of India under DPJ coul .....

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year ended on 31/3/1998 (Page 92 of the paper book) and for the year ended on 31/3/1997 Page 102, 103 of the paper book also makes it absolutely clear. The assessee, therefore, submitted that the said remission of principal amount has been shown as capital reserve since the year 1997-98 to 2007-08 i.e. for almost 11 years. The Assessing Officer as well as the Ld. CIT(A) failed to appreciate that the remission of liability took place in financial year 1997-98 and not in F.Y 2008-09 and hence the .....

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he year 1997-98 and the assessee having written off the amount in books of accounts as is evident from the ledger account and credited the amount to capital reserve the liability ceased to exist in F. Y. 1997-98. The observations of Ld. CIT(A) that this income cannot be claimed exempt under any clause is also wrong. There is no income during the year under consideration. The issue is not of claiming exemption of income, the issue is that there is no income during the year under consideration. On .....

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