TMI Blog2021 (3) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... t and loss account prepared as per provisions of Schedule VI of the Companies Act, therefore, in the facts and circumstances of the case, we set aside this issue to the record of the CIT(A) to re examine the issue light of the relevant provisions of Schedule VI of the Companies Act as well as the relevant accounting standard applicable on this item of expenditure and then give a finding whether this amount of prior period expenditure is required to be part of profit and loss account or not. It is evident that while passing the order, the tribunal has not adverted to the reasoning assigned by the Commissioner of Income Tax (Appeals). Therefore, we answer the second substantial question of law in favour of the assessee and against the reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner of Income Tax (Appeals) with a direction to re-examine the issue in the light of provisions of Schedule VI of the Companies Act, 1956 and the applicable Accounting Standard and give a finding whether the amount of prior period expenditure is required to be part of the profit and loss account or not on the facts and circumstances of the case? (iii) Whether the tribunal erred in not appreciating that the Commissioner of Income Tax (Appeals) has followed the judicial precedents which it turn have already considered the provisions of Schedule VI of the Companies Act, 1956 and the applicable Accounting Standard and thus given a finding that the amount of prior period expenditure is required to be part of the profit and lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;the tribunal' for short). The tribunal vide order dated 29.12.2015 set aside the order of the Commissioner of Income Tax (Appeals) and remitted the matter to Commissioner of Income Tax (Appeals). In the aforesaid factual background, the assessee has filed this appeal. 3. Learned Senior counsel for the assessee submitted that the assessee had debited the prior period expenses of ₹ 14,37,10,403/- in the profit and loss account in its financial statements for the year ending 31.03.2010. It is further submitted that the details of the prior period items were disclosed by way of notes to the financial statements in Note No.17(17). It is also submitted that the Assessing Officer held that as the prior period expenditure has not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port of aforesaid submissions, reliance has been placed on decisions in 'TAMIL NADU CEMENTS CORPORATION LTD. VS. JCIT', (2012) 349 ITR 58 (MADRAS), 'CIT VS. KHAITAN CHEMICALS FERTILIZERS LTD', (2008) 307 ITR 150 (DELHI), 'CIT VS. SAIN PROCESSING WVG. MILLS P. LTD.', (2010) 325 ITR 565 (DELHI), 'CIT VS. KARNATAKA SOAPS DETERGENTS LTD', (2015) 59 TAXMANN.COM 43 (KAR.) AND 'CIT (LTU) VS. SANSERA ENGG. (P.) LTD.', (2016) 386 ITR 349 (KAR.). 4. On the other hand, learned counsel for the revenue submitted that the tribunal has merely remitted the matter to the Commissioner of Income Tax (Appeals) and has not recorded any findings on merits. It is further submitted that this court in this appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is amount was not routed through the profit and loss account. The AO called for clarification on this issue and vide letter dated 31.01.2013 the appellant submitted its reply. However, the AO was not satisfied with the appellant's submissions and added the said expenses by invoking proviso 1 of Explanation to Section 115JB of the Act. 4.2 At the time of appeal hearing, the appellant made detailed submissions, which have been mentioned in the preceding paragraphs. The AR of the appellant also placed reliance on the following judicial pronouncements: (i) CIT vs. Khaitan Chemicals Fertilizers Ltd., (2008) 307 ITR 150 (Delhi) (ii) CIT vs. Sain Processing Weaving Mills Pvt. Ltd. (2010) 325 ITR 565 (Delhi) (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book profit under Section 115JB of the Act irrespective of whether such prior period expenses are shown separately or not. In view of the legal position discussed above, this ground of appeal is allowed in favour of the appellant. 6. The aforesaid finding has been set aside by the tribunal on the following grounds: The CIT(A) has not gone into this aspect of the issue whether this prior period expenditure was required to be part of profit and loss account as per Schedule VI of Companies Act or not. Therefore, if this amount was not required to be part of Profit Loss Account prepared as per Schedule VI of the Companies Act, then undisputedly this amount not being part of any of the clauses of Explanation to Section 115JB cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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