2012 (10) TMI 901

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....araghavan JUDGMENT (Judgment of the Court was delivered by CHITRA VENKATARAMAN,J.) The Revenue is on appeal as against the order of the Income Tax Appellate Tribunal in respect of the assessment year 1989-90, raising the following substantial questions of law: (i) Whether in the facts and circumstances of the case, the Tribunal was right in holding that the prior year expenditure can be adjus....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the ground that the adjustments made were not in order. The claim made under Section 154 of the assessee was rejected. As against the same, the assessee went on appeal before the Commissioner of Income Tax (Appeals). 3. A reading of the order of the Commissioner of Income Tax (Appeals) shows that the assessee kept certain security deposits and earnest money deposits. In order to ensure the perfo....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ing to Rs.53,93,342/-. Under the mercantile system of accounting, expenses relating to the earlier year was not admissible in the subsequent year. The profits of the earlier year should have credited to the profit and loss account, was also taken into account by the Assessing Officer. Thus the adjustments, as done by the Assessing Authority, were on the basis of prima facie facts available in the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....were settled after protracted litigation and arbitration, the crediting and debiting of the receipts and expenses as and when the claims settled were reported in the return, which apparently required an investigation into the claims of the assessee. If the relief on the merits of the claim could be considered only through the process of reasoning, given the limited scope of Section 143(1)(a) of th....