2013 (7) TMI 449

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....ken into scrutiny assessment under section 143(3) of the Income-tax Act, 1961 (for short, hereinafter referred to as "the Act"). The addition was made by the Assessing Officer while finalizing the assessment and expenses of Rs.3,43,60,422/- had been added to the income of the assessee. 1.3 Aggrieved by such an order of the Assessing Officer, the assessee preferred an appeal before the CIT(Appeals) who confirmed the addition of Rs.2,99,63,530/-and deleted the addition of Rs.43,96,892/-. It bifurcated the confirmed addition into three parts namely: 1) Write off of the interest amount of Rs.2,98,49,969/- 2) Provision for interest on deposits of Rs.83,561/- 3) Accrual of underwriting commission of Rs.30,000/- 1.4 As far as the de....

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....e expenses and losses which are incurred in the relevant accounting year. Losses and expenditure incurred before the commencement of that year cannot be the subject-matter of any allowance. For the purpose of computing yearly profits and gains each year is a separate self-contained period of time, in regard to which profits earned or losses sustained before its commencement are irrelevant. Where the accounts are kept on mercantile basis, allowance must be granted in the year in which liability is incurred irrespective of the question whether the disbursement has been made or not". 4. Learned senior counsel Mr. Saurabh Soparkar has urged that loss of interest was not crystallized during the year and the assessee since was following the me....

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....rest income taxed in the past by offering in the books of account was the part of the total income declared by the assessee. However, as there was a doubt with regard to the recovery, the assessee-company reversed the entry. It, therefore, held that the same was not an expenditure which was claimed in the past, but it was an entry of the income & not the real income, which was simply reversed in the year under question. 7. We see no reason to interfere with such finding of the Tribunal which has elaborately discussed the entire issue by applying correctly the law on the subject to the facts of the assessee's case. 8. As can be noted from the material on record that the claim of interest (written off) debited to various accounts of the....