9911796707
TMI Blog2022 (9) TMI 1576X X X X Extracts X X X X X X X X Extracts X X X X ..... t Year 2004-05. 2. By order dated 10.11.2009, TCA No.1114 of 2009 was admitted on the following substantial question of law :- "Whether in the facts and in the circumstances of the case, the income tax Appellate Tribunal is justified in allowing the commission paid to the Managing Director for the assessment year 2004-2005 in the assessment of the appellant company when the appellant company is following mercantile system of accounting and such method of accounting has been accepted by the department in all the other years?" 3. The facts in nutshell placed before this Court are as follows : (i) The Appellant Company /Assessee was engaged in the business of imparting mental arithmetic training through images and mental reckoning metho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the resolution dated 11.12.2003, which permits to increase the remuneration payable to the Managing Director from 01.04.2003 and to pass commission after approval of the members in the ensuing Annual General Meeting, which took place on 30.09.2004, wherein the earlier resolution was ratified. The Assessment Officer did not accept the claim of the Assesee for the Assessment Year 2005-2006 as the liability arose from 2005- 2006. The Tribunal, on scrutiny of the order of Assessing Officer held as follows:- "10. As regards the contention that the department had accepted the assessee's method of accounting in earlier period we find that there is no discussion on this topic in the order for the earlier assessment year produced before u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess, regard being had to be accepted principles of commercial practice and accountancy, it is not as if such deduction is permissible only in case of amounts actually expended or paid. Just as actual receipts as well as those accrued due are brought in for income tax assessment, so also liabilities accrued due would be taken into account while working out the profits and gains of the business. " 4. The learned counsel appearing for the Respondent would submit that the Tribunal has rightly held that the expenditure incurred can be treated as Revenue expenditure and not as capital expenditure and therefore the order of the Tribunal does not warrant interference. 5. Heard the learned counsel appearing for the Appellant as well as the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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