2016 (7) TMI 695

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....ed in the business consultancy services in relation to technical support for development of computed software filed its return of income for the year under consideration, on 30. 09. 2008, declaring its total income at (-)Rs. 52, 90, 494/-. The AO completed the assessment u/s. 143(3) of the Act, 1961 on 20. 10. 2010, assessing the total income of the assessee at Rs. 13, 84, 160/-. 3. Ground No. 3 is about confirming the disallowance of Rs. 9. 72 lakhs on account of excess provisions written back by the assessee. During the assessment proceedings it was found by the AO that the assessee had credited an amount of Rs. 9, 72, 920/- to its P&L Account on account of excess provision written back, that the assessee had claimed that the said amou....

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....referred liabilities in the earlier year. DR supported the order of the FAA. 3. 3. We have heard the rival submissions and perused the material before us. We find that the FAA had upheld the disallowance, made by the AO, that he had held that the assessee had not filed the returns of income, P&L A/c. s for the earlier years. Considering the fact that these basic documents were available to AO as well as FAA, we are of the opinion that before taking an adverse view they should have verified the facts from the available records or should have directed the assessee to file the same. Considering the peculiar facts and circumstances of the case, we are of the opinion that the issue needs further verification. So, in the interest of justice we....

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..... 4. 2. Before us, the AR relied upon the cases of Ghatge Patil Transports (368ITR749) and Hindustan Organics Chemicals Ltd. (366ITR1) of the Hon'ble Jurisdictional High Court. The DR left the issue to the discretion of the Bench. We find that in the case of Ghatge Patil Transports(supra), the Court had held that if the payments were made before the due date of filing of return of income, no disallowance can be made as per the provisions of section 36(1). Respectfully, following the above judgment of the Hon'ble Bombay High Court, we decide Ground No. 4 in favour of the assessee. 5. Last Ground of appeal deals with disallowance of expenses claimed under the head travelling and conveyance expenditure amounting to Rs. 5. 92 l....