2014 (4) TMI 286

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....ad. It filed its return of income on 31.10.2007 declaring 'nil' income after adjusting of brought forward losses. The Assessing Officer passed an order u/s 143(3) dt. 23.10.2009 making additions on account of delay in payment of ESI Contribution, prior period expenses, as well as disallowance of interest u/s 14A. Aggrieved the assessee carried the matter in appeal. The First Appellate Authority partly allowed the appeal of the assessee. The addition made by the Assessing Officer by way of disallowance of prior period expenses of Rs.13,83,267/- was confirmed by the First Appellate Authority. Further the claim of the assessee that the amount of Rs.1.62 crores received by it was not taxable income on the ground that the amount in question pert....

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....mitted that (a) Prior period expenses in question are genuine business expenses and have crystallized during the year, and hence are to be allowed. He submits that the Assessing Officer asked for bills and out of the total prior period expenses of Rs.29.90 lakhs, had allowed an amount of Rs.7,91,144/- on the ground that the interest in question was proved as crystallized and disallowed the balance amount for want of bills. He relied on a number of case laws and submitted that the expenditure should be allowed. 5. On the issue of taxability of the principal amount of loan waived by Financial Institutions, consequent to the restructuring of a debt, the Ld.Counsel submitted that the judgement of Hon'ble Supreme Court in the case of CIT vs. ....

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.... of Hon'ble Supreme Court in the case of NTPC Ltd. reported in 225 ITR. 8. Rival contentions heard. On a careful consideration of the facts and circumstances of the case, on perusal of papers on record, case laws cited, we hold as follows. 9. On the issue of prior period expenses, the assessee has not produced evidence either before the Assessing Officer or before the Ld.Commissioner of Income Tax (Appeals), to substantiate its claim that the expenses in question had crystallized during the year. Under the circumstances, we uphold the order of the First Appellate Authority and dismiss this ground of the assessee. 10. On the issue of application of S.41(1) to the case where principal amount of loan has been waived by the Financial I....