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PRINCIPAL COMMISSIONER OF INCOME TAX-1 Versus ADANI GAS LTD

2017 (1) TMI 857 - GUJARAT HIGH COURT

Disallowance being the preliminary expenditure under Section 35 D - Held that:- It is not in dispute that in the preceding assessment year, very expenditure stand accepted. The issue is squarely covered against the revenue in light of the decision of the Hon’ble Supreme Court in the case of Shasun Chemicals & Drugs Ltd vs. Commissioner of Income TaxII, Chennai reported in (2016 (9) TMI 1199 - SUPREME COURT OF INDIA) wherein the issue was with respect to claim under Section 35 D and it was found .....

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to set off prior period of expenditure of ₹ 15,25,746/. The learned Tribunal has directed the Assessing Officer to set off assessee’s prior period of expenditure and income as per the law. Therefore, necessary consequence shall follow. Under the circumstances, we see no reason to interfere with the impugned judgment and order passed by the learned Tribunal. Question B is also held against the revenue and in favour of assessee - TAX APPEAL NO. 900 of 2016 - Dated:- 11-1-2017 - MR. M.R. SHAH .....

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uestion of law. A. Whether the Appellate Tribunal has erred in law and in facts in deleting the disallowance of ₹ 10,28,028/being the preliminary expenditure under Section 35 D of the Act ? B. Whether the Appellate Tribunal has erred in facts and circumstances in directing the AO to set off prior period expenditure of ₹ 15,25,746/without considering the merit of the issue? 2.0. Heard Ms. Mauna Bhatt, learned counsel for the Revenue and Shri S.N. Soparkar, learned Senior Advocate for .....

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he Act, the learned Tribunal has deleted the disallowance of ₹ 10.,28,028/being preliminary expenditure under Section 35 D of the Income Tax Act. It is not in dispute that in the preceding assessment year, very expenditure stand accepted. The issue is squarely covered against the revenue in light of the decision of the Hon ble Supreme Court in the case of Shasun Chemicals & Drugs Ltd vs. Commissioner of Income TaxII, Chennai reported in (2016) 243 Taxman 47/73 taxman.com 293(SC). In th .....

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ith the view taken by the learned Tribunal. Under the circumstances, question No.1 A is answered against the revenue and in favour of assessee. 4.0. Now, so far as question no.B is concerned, the learned Tribunal has accepted the alternative submission on behalf of the assessee and has directed the Assessing Officer to set off prior period of expenditure of ₹ 15,25,746/. The relevant discussion by the learned Tribunal are in para 6, which reads as under 6. We have heard both the parties. T .....

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g from the case file. Both the lower authorities hold accordingly that the assessee has failed in proving crystallization of the impugned expenditure. Therefore, we do not find any merit in this crystallization plea based in the course of arguments before us. The second substantive ground fails. At this stage, the assessee raises an alternative argument that it is entitled to set off prior period income ₹ 7,55,575/against the above stated prior period expenditure. The relevant grounds plea .....

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