TMI Blog2024 (1) TMI 1233X X X X Extracts X X X X X X X X Extracts X X X X ..... s the assessment order for AY-2010- 2011, that assessment order for AY-2010-2011 having been set aside by CIT(A) in his order dated 18th February 2015 and Revenue having accepted the order, it cannot be said that there was any tangible material to reopen the assessment for AY 2008-2009. Moreover, as decided by this court [ 2011 (7) TMI 1210 - BOMBAY HIGH COURT ] one of the question of law raised was whether the ITAT was justified in deleting the disallowance on account of prior period expenses which did not pertain to the year under consideration when the assessee was following mercantile system of accounting. The court was pleased to hold that the expenditure would be allowable. In the affidavit in reply, none of the averments in the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debited in P L account as prior period expenses. Since the assessee is following mercantile system of accounting and prior period expenses claimed in P L account as not allowable. Therefore, I am of the opinion that, income chargeable to tax to the extent of Rs. 1,25,06,591/- has escaped assessment within meaning of section 147 of the Income Tax Act, 1961. 3. Petitioner filed its objections vide letter dated 23rd November 2013 alleging that reopening is based entirely on information contained in the return itself and not on any fresh tangible material and, therefore, it was change of opinion. It was also submitted that when petitioner s case was selected for scrutiny, the notice alongwith questionnaire was issued to petitioner on 27th Augu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground of appeal no. 2 raised the appellant has contested the disallowance of prior period expenses of Rs. 7,97,780/-. The Assessing Officer has discussed this issue in para 5 of the assessment order. The Assessing Officer held that since the assessee was following mercantile system of accounts the claim of prior period expenditure debited to the profit and loss account was not allowable in the year under consideration and was added back to the total income. 4.1 4.2 In view of the above facts following the ratio of aforesaid decisions of the Hon ble Bombay High Court and jurisdictional ITAT Bench in appellant s own case the Assessing Officer is directed to delete the addition made on account of prior period expenses and the ground of appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, save and except, it states that the notice has been issued after obtaining prior permission of the concerned authority. 8. In view of the above, we are satisfied that the reopening cannot be sustained. Therefore, Rule issued on 16th July 2014 is made absolute in terms of prayer clause (a), which reads as under: (a) That this Hon ble Court may be pleased to call for the papers and proceedings and records and to declare the impugned reassessment proceedings in the petitioner s case for AY-2008-09, based on the notice u/s 148 u/s 147-148 of the Income Tax Act dated 28.3.2013 (Exhibit F) and the impugned order dated 27.2.2014 (Exhibit L), to be wholly without jurisdiction, illegal and liable to be quashed and set aside. - - TaxTMI - TMITa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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