2021 (6) TMI 444

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....er of income Tax (Appeals) - 8, Mumbai (hereinafter referred to as "the Ld. CIT (A)") erred in law and on facts in upholding the disallowance of Rs. 4,25,53,711/- on account of society commission by treating the same as prior period expenditure. 2. The Ld. CIT (A) erred in law and on facts in not allowing Society Commission of Rs. 4,25,53,711/- in the assessment year under appeal even though the liability for the same was crystalized in financial year 2012 - 13 vide order dated June 19, 2012, passed by the Collector & District Magistrate, Bijnor, Uttar Pradesh and was paid in the assessment year under appeal. 3. The 14. CIT (A) erred in law and on facts in not appreciating the fact that the societies commission payable to ....

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....tion of power and ancillary products. On appraisal of tax report, it was observed that the assessee qualified an amount of Rs. 4,25,53,711/- towards prior period expenses. The same was on account of society commission on purchase of sugar cane for the period February and March 2012. The same was not liable to be allowable, therefore, the AO issued the notice. After the reply of the assessee, the AO rejected the claim of the assessee and raised the addition in sum of Rs. 4,25,53,711/-. The total income of the assessee was assessed in sum of Rs. Nil and Book Profit u/s 115JB of the Act in sum of Rs. 4,74,92,783/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who confirmed the order of the AO, therefore, the assessee has f....

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....d by Collector & District Magistrate, Bijnor, Uttar Pradesh. The commission was paid under the statutory provision in view of the UP Sugarcane (Regulation of Supply and Purchase) Act, which was crystalized under order dated 19.06.2012 passed by Collector & District Magistrate, Bijnor, Uttar Pradesh. This type of commission can be said to be paid under statutory obligation. In the case of ITC Ltd. Vs. CIT, it has been held:- "Excise duty liability pertaining to earlier year is allowable in subsequent year when the same is adjudicated and paid as per the provisions of Section 43B of the I. T. Act, 1961. Further, even before the introduction of Section 43B such liability pertaining to earlier year is allowable in subsequent year when ....