2021 (1) TMI 771

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....upholding the impugned addition of Rs. 45,14,322/- in respect of alleged prior period expenses. 2. The ld. CIT(Appeals) ought to have accepted the explanation offered by the appellant vide letter dated 29.02.2012 and further submissions made before him and refrained from upholding the impugned addition. 3. Without prejudice, the impugned addition as upheld by the learned CIT(Appeals) is arbitrary, excessive and ought to be deleted in full. 4. For these and such other grounds that may be urged at the time of hearing, the appellant prays that the appeal may be allowed." 3. The facts of the case are that the assessee is a PWD contractor and a mine owner carrying on the business of iron ore by obtaining lease granted by Ministry of Envir....

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....by making the following additions: Income declared as per return 1,86,65,990 Additions made   Disallowance made in order u/s. 143(3) dated 24.12.2009 passed by DCIT, Bellary is being kept as it is a. Certain Direct Expenses 10,00,000 b. Diff. in value of Closing Stock 8,47,500 18,47,500 Prior Period Expenses 45,14,322 Assessed Income 2,50,27,812 Tax thereon 75,25,544 Balance payable after adjustment of prepaid taxes 24,38,120 4. Against this, the assessee is in appeal before us. The Ld. AR submitted that the sales booked twice in earlier year now reversed. Based on the order of M/s. Hamsa Minerals (India) Pvt. Ltd., Hospet, the Ld. AR submitted that the assessee allocated 98954.360 M. tons of Iron Ore in the yard exc....

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....ee booked the expenses based on the quality of service for Rs. 19,36,575/-. However, the Ld. AR submitted that after a series of arguments with parties and materialization of the transaction, balance amount of Rs. 11,18,336 was booked as expense crystallized after settlement of dispute and the same was taken to prior period adjustment. 4.2 Regarding service tax on screening charges, the Ld. AR submitted that during the financial year 2005-06 the assessee had received the screening charges bill for the period 19-06-2005 to 01-07-2005 vide Bill No. 01/AMTL/NTN/2006-07 dated 06/07/2005 and on the bill, the service provider had not claimed the service tax. The Ld. AR submitted that in the financial year 2006-07, the service provided had claime....

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....an independent assessment year. Expenditure of one assessment year cannot be allowed in another assessment year. In the present case, the expenditure claimed by the assessee relates to the earlier assessment year which cannot be allowed in the present assessment year. 6. We have heard the rival submissions and perused the material on record. The Ld. AR made a claim of expenses relating to the previous assessment year to be allowed in this assessment year without producing an iota of evidence to show that the impugned expenses is relating to the assessment year under consideration. It is to be noted that the audit report clearly states that the assessee was following mercantile system of accounting and therefore, only expenses relating to t....