TaxTMI 
TaxTMI 
2017 (4) TMI 605
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.... order u/s 143(3) of the Income Tax Act, 1961 (the 'Act'). 2. The grounds of appeal filed by the revenue read as under: i. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in allowing the prior period expenses of Rs. 10,70,534/- ignoring the fact that the assessee is following mercantile method of accounting and the said expenses have not been incurred during the relevant previous year. ii. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in allowing the forex derivative loss of Rs. 2,89,00,000/-, ignoring the fact that the claim of the assessee is in contravention of instruction No. 3 of 2010 dated 23.03.2010 of the CBDT. iii. On the facts and in the circumstances of t....
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....s, the learned DR supported the order passed by the AO. On the other hand the learned counsel of the assessee relied on the order passed by the learned CIT(A). 3.2 We have heard the rival submissions and perused the relevant material on record. In Saurashtra Cement 213 ITR 523, it has been held by the Hon'ble Gujarat High Court that though the expenditure relates to prior period, if the liability has accrued during the year, then the expenditure has to be allowed as deduction. Also in CIT vs. Exxon Mobil Lubricants P. Ltd. 328 ITR 17, it has been held by the Hon'ble Delhi High Court that when prior period income is taxed prior period expenditure cannot be disallowed. In view of the above decisions, we uphold the order passed by th....
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....d ground of appeal filed by the revenue. As the learned CIT(A) has specifically set aside the above issue to the file of the AO, the 2nd ground of appeal is dismissed. 5. The 3rd ground of appeal relates to the claim of depreciation @ 80% by the assessee on energy efficient devices. The AO found that most of the devices were 'servo stabilizers' and quite different from automatic voltage controller. The other equipments were 'surge suppressors' and 'harmonic filters'. None of these are listed under clause "E", which lists the electrical equipments to be treated as energy saving device in the 'Depreciation Table' given in Income Tax Rules, 1962. Therefore, the AO allowed the depreciation at the normal rate of 15% and disallowed the balance o....
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....reciation, and further having not claimed any depreciation on these 3 types of assets involved in these three grounds, no disallowances could have been made. In view of this A.O. is directed to look into the accounts to ascertain and satisfy himself that no such expenses have been claimed under the head depreciation by the appellant in the profit and loss account and accordingly to allow. The ground number 4, 5 and 7 are treated as allowed for statistical purpose." 6.1 Having heard the rival submissions and perused the relevant material on record, we find that the learned CIT(A) has given a specific direction to the AO to examine the accounts and arrive at a finding after verification. The learned CIT(A) has not allowed the claim of deprec....
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....isfy himself that no such expenses have been claimed under the head interest by the appellant in the profit and loss account. Further statistical purpose ground number 8 is treated as allowed." 7.1 Having heard the rival submissions and perused the relevant material on record, we find that the learned CIT(A) has not allowed the interest of Rs. 81,55,961/- pertaining to capital WIP as made out in the 5th ground of appeal. Rather the learned CIT(A) has given a specific direction to the AO to examine the accounts and then arrive at a finding after verification. In view of the above, the 5th ground of appeal is dismissed. 8. In the result, the appeal filed by the revenue is dismissed. 9. Now we come to the grounds of appeal filed by the asse....
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....ding submitted that these repair expenses do not pertain to the lease out premises. In absence of any supporting evidence for the same, the reply of appellant cannot be relied upon. The appellant have not negated the observation made by the AO in the assessment order that they did reply so during the assessment proceedings by their letter dated 8.12.2010. In view of this I am of the opinion that appellant has switched over from their earlier stand without negating the facts that they did admit so before AO. In absence of any contradiction made to the same, I am of the view that action of AO to disallow proportionate expenses, looking into the fact that appellant have already deducted by making a claim under section 24 also, the addition mad....