TaxTMI 
TaxTMI 
2023 (8) TMI 370
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....cumstances of the case and in law the Ld. CIT(A) erred in not allowing depreciation of Rs. 19,067/-. 5. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in confirming the disallowance of Rs. 4,62,000/- made by the Ld. A.O by invoking the provisions of Sec 40A (3) of the Income Tax Act, 1961 6. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in confirming the addition of Rs. 17,59,687/- on account of difference in the profit. 7. The Appellant crave leaves to add, amend, alter, modify and or withdraw any of the above grounds of appeal, which are without prejudice to one another. The appellant prays this Hon'ble Tribunal to delete the additions/disallowance made by the Ld. AO to the extent confirmed by the Ld. CIT(A). 2. Brief facts of the case are that assessee filed return of income on 30.09.2009 declaring total profit of Rs. 11,15,88,425/-. This return was revised on 26.09.2010 declaring loss of Rs. 1,30,59,943/-. Case of the assessee was selected for scrutiny. Assessee is a State Government PSU and subject to audit by the auditor appointed by C & AG. 3. Initially the original return was filed on the basis o....
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....nd may be under the pressure of compliance management may appoint another Auditor without backing of law, that does not mean that the same will be a proper compliance of law. If version of the department is accepted, it will create a great difficulty in the matters of PSUs (State & Central), wherein sometimes appointments of Auditors are late for various reasons, but on the other hand no one else other than C&AG Auditor can conduct the audit of accounts and Tax Audit. 7. Ground No. 1 pertains to disallowance of Rs. 10,07,37,891/- being advance written off in the revised return and ground no. 2 pertains to bad debts written off. A fact pertinent to the issue is already on record and accepted by the Ld. CIT(A) Also, "Being advances written off in the revised return of income filed, which were duly approved by the shareholders in the AGM held after filing the original return of income". It means whatever may be the accounts and tax audit reports filed with the Original Return, were not duly approved by the shareholders in the AGM. There are no arguments on merits by the revenue while disallowing the same u/s. 37(1), except that the same were not claimed in the original return. As dis....
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....the AUDITORS to reconcile, audit, pass rectification entry (if any), passing of journal entry in the Books, any correction by the auditors, or decision regarding debit of expenditure or any outgoing or credit of any income or receipt, accounting of any asset or liability different from what the assessee has already done, can and shall only be taken after 1-4-2004. Hence whether any decision for debiting an entry or crediting an entry is to be taken, whether by the auditors, Management or by the management on, the advise and guidance of the Statutory Auditors so as to disclose the correct income for the purpose of assessment, will only be taken on or after 1-4-2004. Hence whether the same is taken on 1-4-2004 or 30-9-2004 or any other date after 1-4-2004 will not change the nature and complexion of the entry. In the present case, when the due date for filing return came, the accounts had not been completely audited and finalized the Books were still subject to audit and open for any correction by the auditors. Hence any decision made before finalization of Accounts can in any manner effect and correct the Accounts and the decision so taken has in all circumstances to be considered a....
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....off should be done in the previous year, i.e., before end of the financial year. 8. In the present case, debts relating to the period 1987-88 and 1998-99 claimed in the accounts which were prepared up to 31-3-2004 and as the accounts of the assessee are open and subject to corrections by the Auditors, as per the Companies Act, then such writing off can be done in those account books. No new legal proposition has been brought to our notice for treating the debt as bad or irrecoverable should be taken in the previous year itself. In other words, where account books are not closed and not signed by the Board of Directors and not adopted by the shareholders as per the Companies Act, it is legally permissible to make adjustments before they are finally adopted. 9. Further, it is admitted that the original return, on the basis of unaudited accounts, was filed on 1-11-2004. After audit had taken place and report of the Auditors was accepted, revised return was filed on 18-8-2005 and it is only in the revised return, the debts to the tune of Rs. 2 crores and odd had been declared as bad. The ground taken by the Assessing Authority and Appellate Authority for not accepting the said ba....