TaxTMI 
TaxTMI 
2023 (7) TMI 1147
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....11. 2. We shall first deal with the appeal of the assessee in ITA No.322/Ahd/2022 for AY 2010-11. 3. Ground No.1 raised by the assessee is a general ground and, therefore, the same is not being dealt with us. 4. Ground No.2 reads as under:- i) The learned CIT(A), NFAC has erred in confirming the net disallowance of Rs. 2,28,91,059/- (after allowing depreciation of Rs. 40,39,599/-) made by Ld.AO, being expenditure incurred of replacement of Membrane Cells, treating the same as of capital in nature. The appellant submits that the replacement were carried out in the ordinary course of business and hence it is rightly claimed as revenue expenditure. ii) It is also submitted that the expenditure in question, although large in quantum, did....
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....venue expenditure by the ITAT, confirmed by the Hon'ble High Court and also by the Hon'ble Supreme Court, in preceding years. We have noted that this contention was raised by the assessee before the Ld.CIT(A) NFAC also as reproduced at page No.6 of the order, however without giving any cognizance to the same, the Ld.CIT(A)NFAC upheld the disallowance of impugned expenses and treated them to be capital in nature. 5. Before us, Ld.DR was unable to controvert the contention of the ld.counsel for the assessee that the issue was covered in favour of assessee by various orders of the ITAT, the Hon'ble Gujarat High Court and even the Hon'ble Apex Court in the case of the assessee itself in preceding years. The ld.counsel for the assessee placed ....
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.... ii) It is also submitted that the aforementioned liability was crystallized during the year but only accounting of the same has been booked under the head prior period expenses and shown accordingly in the annual accounts.] iii) Moreover, the appellant would like to draw attention of your honour that, it is apparent from the copies debit note produced during the Appeal proceedings that the same was received during the year and accordingly claimed during the year. iv) Without prejudice to the above, the claim of appellant was rightly allowed by CIT(A) in the appeal proceedings against the assessment order issued u/s. 143(3) of the Act for the same year i.e. AY 2010-2011 where the same ground has been challenged and the same was held in....
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....on of profit as per normal provisions of the Act only (related to which it was given relief perhaps by CIT appeal against original assessment order) it should also be added while computing book profit. But even if they were not added; items of expenditure of prior period would have to be added to Compute Book Profits as per following discussion:- 5.3.3.4 However let us now consider the main item of PRIO PERIOD EXPENSES as was submitted by the appellant. These are as under:- Manufacturing & operating expenses Rs. 4,63,88,745: 1. Debit notes raised by GIPCL due to change in billing pattern of power consumption for FY 2008-09 and 2. Debit notes raised by GSFC for raw water received during FY 2007-08 for Rs. 2,40,147. Prima facie, the....
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....o not qualify as prior period expenses. Therefore, there is no question for making any adjustment of the same to the book profits of the assessee by treating them as period expenses. For this reason alone, the adjustment made confirmed by the Ld.CIT(A) of alleged prior period expenses amounting to Rs. 4,63,88,745/- is set aside. Ground No.3 of assessee's appeal is allowed. 10. In effect, the appeal of the assessee in ITA No.322/Ahd/2022 for AY 2010-11 is allowed. 11. Now we take up the Revenue's appeal in ITA No.319/Ahd/2022 for AY 2010-11, wherein the following grounds have been taken:- (1) On the facts and in the circumstances of the case and in law, the Ld.CIT(Appeals) has erred in deleting the addition of Rs. 4,63,56,702/- made by t....