TaxTMI 
TaxTMI 
TaxTMI 
2021 (4) TMI 760
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....f the assessee: 1. The learned CIT(A) has erred in law and facts by upholding the action of AO/TPO in rejecting a comparable considered by the appellant in the comparability analysis. 2. The learned CIT(A) erred by not accepting the appellant's plea that a comparable (i.e. a company whose financial statements were for a period of nine months) should not be rejected particularly when it met the criteria for selection as comparable. 3. The learned CIT(A) has erred in law and facts by upholding the disallowance of Rs. 1,58,512/- on account of prior period expenses ignoring the plea of appellant that the expenses accrued during the relevant assessmet year even though pertaining to the previous accounting period. 4. That the appellant reserves to itself, the right to add, alter, amend, substitute and/or withdraw any ground(s) of Appeal on or before the date of hearing. 2. The briefly stated facts of the case are that the assessee company is engaged in the business of manufacturing and sale of tractors, shockers, railway equipment etc. and other trading activities. For the year under consideration, the assessee filed return of income on 30/09/2009, declaring nil income under reg....
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....e appeal, in case the tax effect is found to be more than the prescribed tax effect in the relevant CBDT circular or the case is covered in any of the exceptions in said circular. Accordingly, the appeal of the Revenue is dismissed. 7. As far as appeal of the assessee is concerned, the learned Counsel of the assessee before us submitted that Ground No. 1 & 2 of the appeal were not pressed by the assessee and accordingly both these grounds are dismissed as infructuous. 8. As far as ground No. 3 of the appeal is concerned, the learned Counsel of the assessee reiterated the submissions made before the learned CIT(A) and referred to various pages of the paper-book . He also relied on the decision of the Tribunal in ITA No. 4235/Del./2014, dated 09/03/2018 for assessment year 2005-06. 8.1 The Learned DR, on the other hand, relied on the order of the lower authorities. 8.2 We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. We find that the Assessing Officer has disallowed prior period expenses of Rs. 1,58,512/- on the ground that same pertain to earlier years. Out of the prior period expenses disallowed, the expenses of Rs....
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....ceived for payment of the bills. c) The expenditure of Rs. 50,000/- pertains to professional charges bill of Mr.A.S. Chandhiok. The Bill dated 05.01.2008 of the party was received by the legal department of the company and was subject to verification. The legal department did not verify and approved the bill for payment till the finalization of account for the year ended 31.03.2008. The bill was finally passed and approved for payment by the legal department in November, 2008 and accordingly vouched in the books of account on 29.11.2008. The liability to pay this expenditure arose during the assessment year 2009-10 and accordingly the same has been rightly booked. There is no case for any disallowance of this expenditure as a prior period expense. Engineering Division (ASP) The expenditure of Rs. 23,021/- pertains to various small value purchases made at the ASP division of the company towards the end of the accounting year 2007-08. As per procedure, such bills are verified, processed and then approved for payment The approval for these expenses was received by the finance department during the assessment year 2009-10 and accordingly booked in the accounts during the assessme....
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....Once Auditor has certified that these expenses are prior period expenses then such expenditure cannot be allowed unless proved otherwise, as books of accounts of a company are admittedly prepared on accrual basis. Ld. AR's argument that such type of expenses be allowed by CIT(A) in earlier AYs cannot help the appellant as such assessment year is separately assessment unit and facts are different. Considering entire's stances of the case, I hereby confirm the addition made by the assessing officer. The ground of appeal is dismissed." 8.4 I have considered the facts and the circumstances of the case and perused the order of the assessing officer as well as the submissions of the appellant. The material facts of the case are the same in the instant year also. In accordance with the principle of consistency and respectfully following the order of the CIT(A) in AY 2011-12, the addition made by the AO is confirmed . The ground of appeal is dismissed." 8.3 The assessee is following Mercantile system of accounting. Prior period expense are generally those expenses which are relating to the current year in the sense they are crystallized during the year, though relating to activities....