2014 (3) TMI 148

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....lant Gujarat Gas Company Limited is engaged in the business of laying down pipelines and supplying gas to the ultimate users. For such purpose, it lays down underground pipelines. For laying down such pipelines in the industrial areas of GIDC, the assessee was required to pay rent to the GIDC. In the return filed for the A.Y 19992000, the assessee claimed a sum of Rs. 1.70 Crores [rounded off] towards such rent for the entire period between 1990 to 1997. The Assessing Officer disallowed the claim, upon which, the assessee approached the CIT [A] who also confirmed the view of the Assessing Officer. The assessee approached the Tribunal. The Tribunal allowed part of the claim of Rs. 43.87 lakhs of the rent liability pertaining to the presen....

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....s judgment of the Tribunal, which the assessee has challenged before us. Learned counsel for the appellant placed on record relevant portion of the paper-book. Counsel for the appellant produced a set of documents which form part of the paper-book before the Tribunal. On the basis of such documents, he contended that the Tribunal committed a serious error in rejecting part of the appellant's claim. He submitted that between the appellant and GIDC, negotiations were going on regarding appropriate rate to be charged for user rent. Appellant was hopefully persuading GIDC to reduce the rates. Finally, when the GIDC did not accept such request, the amount was claimed by way of deduction. A provision in this respect therefore was made in t....

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....der review, the Company had debited a sum of Rs. 1.70 Crores for GIDC rent as previous year expenses. It was further stated that the liability of rent to GIDC had crystallized during the year and hence it was claimed accordingly. There was, however, no elaboration how such liability crystallized during the said period. During the assessment proceedings also, in reply to the explanation called for by the Assessing Officer with respect to this item, it was contended that, "with reference to GIDC Rent, it is submitted that, the company has laid pipelines in the GIDC Ankleshwar and Bharuch areas, for which company has to pay the lease rent to GIDC. As the Company is having mercantile accounting system, expenses are accounted on accrual basis. A....