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TMI Blog2016 (12) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment order dated 31st October, 2011 passed by the learned Assessing Officer (hereinafter called "the AO") u/s 143(3) of the Income Tax Act,1961 (Hereinafter called "the Act"). 2. The grounds of appeal raised by the assessee in the memo of appeal filed with the Income Tax Appellate Tribunal, Mumbai (hereinafter called "the Tribunal") read as under:- "I. On the facts and in the circumstances of the case and in Law, the Commissioner of Income tax (Appeals) erred in confirming the addition made by the Assessing Officer of expenses which were not of prior period. 2. On the facts and in the circumstances of the case and in Law, the Commissioner of Income tax (Appeals) erred in assuming that the assessee should have made provisions fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct which was completed in the preceding year and the same were disallowed by the A.O. on the basis of that they were prior period expenses. The assessee submitted that the expenses were incurred during the relevant assessment year and the payments were also made during the relevant assessment year. The assessee completed the project in March, 2008 and handed over the same after occupancy certificate was received in March 2008. It was submitted that the project was sold to Pusti Enterprises Pvt. Ltd. No provisions were made towards the expenses as the nature of expenses incurred after the completion of the project were towards water connection, accessories required in the fire fighting equipments and other minor wear and tear electric, plumb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s conferred by sub-section (2) of section 145 of the Act, the Central Government vide F.No.132/7/95-TPL dated 25th January, 1996 has notified two accounting standard (AS) which has come into effect from 01.04.1996 and, therefore, applies to the assessment year 1997-98 and subsequent years. AS-I relates to disclosure of accounting policies whereas AS-II relates to disclosure of prior period and extraordinary items and changes in accounting policies. The ld. CIT(A) observed that in the preceding year the assessee carried a project at Hill Road which was completed and income offered to taxation during assessment year 2008-09. No new project had been undertaken in the previous year relevant to the impugned assessment year . This expenditure cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year. 8. On the other hand ,the ld. D.R. relied on the order of the ld. CIT(A). 9. We have considered the rival contentions and also perused the material available on record. We have observed that the assessee has incurred certain expenses which are related to the assessee's project which was sold in the preceding year . It is the submission of the assessee that these expenses incurred by the assessee are related to the project which is already sold but on the complaint of the buyer to meet the expenses to cover the deficiency in the project like water connection, accessories required in the fire fighting equipments and other minor wear and tear expenses etc. which are required to comply with the terms and conditions of the sale agree ..... X X X X Extracts X X X X X X X X Extracts X X X X
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