TaxTMI 
TaxTMI 
2020 (1) TMI 987
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...., 1961 (hereinafter referred as to 'the Act') arising out of the order dated 30.12.2011 passed by the JCIT, Gandhinagar Range, Gandhinagar for Assessment Year 2009-10. Ground No. 1:- 2. Disallowance under section 14A of the Act Rs. 1,88,087/- as per provision of Rule 8D. Ground No. 2:- 3. Disallowance of prior period expenses Rs. 26,40,010/- while calculating income under the normal provision of the Act. Ground No. 3:- 4. Addition of Rs. 14,92,00,000/- towards amount received on account of advance against depreciation. Ground No. 4:- 5. Levy of interest under section 234D and recovery of interest under section 244A of the Act. Ground No. 5:- 6. Initiation of penalty proceedings und....
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.... of Kedarnath Jute Mfg. Co. Ltd.-vs-CIT reported in 82 ITR 363 (SC). On the other hand, Ld. DR relied upon the order passed by the authorities below. 11. Heard the respective parties, perused the relevant materials available on record. It appears from the records that while rejecting the case of the assessee, the Learned AO observed that the assessee is following mercantile system where expenditure is recorded if it is due during the previous year irrespective of fact whether it is paid during the previous year or not. Under the above circumstances, since the assessee is consistently following the mercantile system of accounting, expenses incurred prior to relevant accounting period are not allowable as expenses in subsequent years. O....
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....he liability is allowable in the year it crystallized and thus the claim of the assessee seems to be justified and hence allowable. The addition made in this respect is, therefore, deleted. 14. Ground No.3: The addition of Rs. 14,92,00,000/- towards amount received on account of advance against depreciation which has been upheld by the Learned CIT(A) has been challenged before us. 15. At the time of hearing of the instant appeal the Learned Sr. Counsel appearing for the assessee submitted before us that when the query was raised as regard such advance depreciation the assessee stated as follows as it appears at page 128 of the Paper Book filed before us: "Reply: As per Power Purchase Agreement - PPA with Gujarat Urja Vikas Ni....
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..... 14.92 crores, such income would not be liable to be taxed in the year in which the appellant company has shown any income. Being aggrieved by the same the assessee is before us. 16. We have heard the respective parties perused the relevant materials available on record. In terms of the power projects agreement as it appears from the records the appellant company has been raising invoices to Gujart Urja Vikas Nigam Ltd. (GUVNL) on the calculation of fixed charges as mentioned therein. One of such components of fixed charges is depreciation. It was further agreed between the two parties that in the year the appellant since has been facing heavy cash flow due to repayment of debenture, Gujarat Urja Vikas Nigam Ltd. (GUVNL) will give amoun....