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TMI Blog2016 (5) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned Commissioner of Income Tax (LTU) erred in invoking the provisions of section 263 of the Income Tax Act, 1961. 2.1. The learned Commissioner of Income Tax (LTU) erred in initiating proceedings in respect of a debatable issue. 2.2. The learned Commissioner of Income Tax (LTU) failed to appreciate that no revision proceedings can be initiated if the Assessing Officer adopts one of the possible views. 3 Learned Commissioner of Income Tax (LTU) erred in taxing Rs. 1,11.49,569!- as prior period expenses. 3.1. Learned Commissioner of Income Tax (LTU) failed to appreciate the fact that these expenses were crystallized during the Previous Year relevant to assessment year 2009-10. 3.2.Learned Commissioner of Income Tax (LTU) er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese expenses were crystallised in the previous year relevant to assessment year 2009-10 and accounted for. It was also explained that though the nature basically is prior period expenses, however, in reality these are not the prior period expenses as the liability has been crystallised in the previous year relevant to assessment year under consideration. Therefore, the assessee contended that these are allowable expenditure during the previous year relevant to the assessment year under consideration. The CIT did not accept the contention of the assessee and observed that in order to decide the issue whether prior period or not one has to go into the nature of the expenditure and then decide the allowability of the expenditure. He further o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch expenditure were raised only after the close of the accounting year should be accepted. It is continuous process to incur expenditure and to account in the books of account though they are treated technically as prior period expenses which relate to continuous flow of expenditure. Therefore, there is no justification in disallowing such expenditure. In support of his contention he has relied upon the following decisions; i. Union Bank of India (16 Taxman.com 304(Mum), ii. iii. Bank of India (27 Taxmann.com 335(Mum), iv. UP Projects Corporation Ltd. 2015(1)TMI 105 - ITAT Lucknow, v. Winsome Yarns Ltd. 2014(12) TMI 433 - ITAT Chandigarh. The learned AR of the assessee submitted that in the case of UP Projects Corporation L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CIT, in the revision proceedings, assessee contended that the expenditure was incurred by the branches of the assessee across the country and therefore, the expenditure is allowable as revenue expenditure. It was also contended that the liability is in fact crystallised in the year under consideration and the payment was also made during the previous year relevant to assessment year under consideration. Therefore, it was urged that in reality, this is not a prior period expenditure. Alternatively, the assessee has contended that when the assessee has also offered prior period income, then the prior period expenditure cannot be disallowed. We find that the AO has not taken up this issue for examination and verification and therefore, no fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e subject matter of the revision proceedings, then the CIT was justified in invoking the jurisdiction u/s 263 of the Act. Though the learned AR of the assessee has contended that when the assessee has offered the prior period income to tax, then prior period expenditure cannot be disallowed. However, this contention of the assessee is also required to be verified and examined on the point that how much and whether any such prior period income has been offered by the assessee to tax. The CIT has not given any concluding finding on the allowability of the said expenditure for want of complete details and record therefore, the issue was remitted to the AO with the direction to be decided in accordance with law. When the assessee has not furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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