TaxTMI 
TaxTMI 
2021 (6) TMI 526
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.... file perused. 2. The assessee's first and foremost substantive ground seeks to reverse both the lower authorities' action disallowing its prior period expenditure of Rs. 47,50,000/- on the ground that the same does not pertain to the impugned assessment year. The CIT(A)'s detailed discussion to this effect reads as under: "7. The Ground Nos.7 and 8 are with regard to disallowing the expenditure of Rs. 48,50,000/- as they are prior period items. 7.1 During the course of assessment proceedings, with regard to above grounds, the AO observed from the P&L account that the assessee debited an amount of Rs. 47,50,000/ - towards "Prior Period Expenditure". As this expenditure relates to earlier year and was not incurred during the relevant p....
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.... income chargeable under the head "Profits and gains of business or profession". Explanation 1. - For the removal of doubts, it is hereby declared that any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law shall not be deemed to have been incurred for the purpose of business or profession and no deduction or allowance shall be made in respect of such expenditure. Explanation 2. - For the removal of doubts, it is hereby declared that for the purpose of sub-section (1), any expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 (18 of 2013) shall not be deemed to be an expenditure incurred ....
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....im for the precise reason that the same ought to have been claimed in the relevant previous year in which the same was incurred. The assessee's case on the other hand is that it claimed the instant head of expenditure only in the year of crystalisation i.e. AY.2014-15 than the earlier corresponding assessment year(s). It is an admitted fact that the Assessing Officer's as well as the CIT(A)'s detailed discussions have been fair enough in not disputing this clinching crystalisation aspect. Coupled with this, the assessee has been assessed at the same rate all along. The hon'ble Gujarat high court's decision in PCIT Vs. Adani Enterprises Ltd., (Tax Appeal No.566 of 2016) holds that the impugned prior period expenditure disallowance in such a ....