TaxTMI 
TaxTMI 
1982 (9) TMI 147
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....the year of account has been claimed. The details of expenditure not relating to the year of account are as under: For the period ending Rupees 31st March 1971 13,162 31st March 1972 11,242 31st March 1973 2,236 31st March 1974 13,724 31st March 1975 10,253 31st March 1976 12,581 . 63,198 These expenditure are mostly in the nature of revenue expenditure such as travelling expenditure, stationery, postage, registration charges, interest, electricity charges, licences, rent, audit fees, salaries, cycle repairs and miscellaneous expenses. 3. The ITO wanted to disallow the revenue expenditure which did not relate to the year of account. So the assessee in its letter objected to the disallowance on the ground that the business ....
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....or year 1971-72 was completed on 22nd November 1977 and for 1973-74 on 19th August 1974. It is, therefore, clear that the expenses relating to the previous years ending 31st March 1971 and 31st March 1973 cannot be allowed for this year as the assessments relating to those years were already completed. 4. While computing the income for the year ending 31st March 1977 the assessee did not admit profit on sale of motor cycle amounting to Rs. 3300 as it relates to the asst. yr. 1976-77. 4. In appeal the CIT(A) agreed with the ITO. He stated as follows: "....Clause 5 of the partnership deed which is in Tamil deals with the closing of accounts. A free transaction of this clause, according to the appellant is as follows: "Normally our busine....
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....to claim the expenditure of each year in the concerned assessment and not to carry identifiable contract extending over a period of years in which expenditure, even though incurred in more than one year, is set off against the receipts so that the net profit on that particular contract can be determined. I am therefore of the view that the ITO was justified in disallowing the expenditure of Rs. 63,198. 5. Therefore the assessee appeals to the Tribunal for relief. The assessee pointed out to us that the department in assessee's own case has accepted this method of accounting. For asst. yr. 1967-68 the profit and loss account has been drawn up for 1st April 1964 to 31st March 1967. The net profit arrived at was Rs. 7,976. That net profit wit....