TaxTMI 
TaxTMI 
2025 (4) TMI 1675
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...., we take up the appeal no. 7626/Del/2018 for A.Y 2005-06 as the lead case. ITA No. 7626/DEL/2018 [A.Y. 2005-06] [Assessee's Appeal] 3. The grounds raised by the assessee read as under: "1. The Ld. CIT (A) has erred in facts and in law by not deleting the addition made by Ld. Assessing Officer being Prior Period Expenses. 2. The Ld. CIT (A) has erred in facts and in law by not deleting the addition made by Ld. Assessing Officer being Disallowance u/s 14A. 3. The Ld. CIT (A) has erred in facts and in law by not deleting the addition made by Ld. Assessing Officer being Revenue Derecognition in Accounts 4. The Ld. CIT (A) has erred in facts and in law by not deleting the addition made by Ld. Assessing Officer being Revised Return not considered. 5. The Learned CIT(A) has erred in fact and in law by not giving the benefit of Incremental Special Reserve u/s 36(1)(viia)(c) & 36(1)(viii) on the additions/disallowances made by the assessing officer. 6. That the appellant craves to add, delete or modify any grounds of appellate time of hearing." 4. In addition to the above grounds of appeal, the assessee has filed an applicat....
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....certain delays in receiving the data from multiple locations and the same would be received by the head office only after the completion of audited financial statements. Accordingly, the details which were received after the completion of audit were booked as prior period expenditure and also where the expenditure stood crystallized during the year under consideration, even though the assessee pertains to earlier years were also booked under prior period expenditure. As per the mandate of Companies Act to show prior period items separately in the financial statements, this sum of Rs. 3 lakhs was reflected by the assessee separately in the profit and loss account. The assessee gave the details of the said expenditure before the Id AO as under:- Rs.(in '000) Office Rent Rs. 149; Water and Electricity Rs. 16; Interest in investment Rs. 130; Other expenditure Rs. 5; Total Rs. 300. 3.2. The Id AO however did not heed to the contentions of the assessee and proceeded to disallow this sum of Rs. 3 lakhs as expenditure not pertaining to the year under consideration. This action of the Id AO was upheld by the Id CIT(A). 3.3. The Id AR before us fairly submitted that let the....
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....axopp Investment Ltd. and Ors. Vs. Commissioner of Income Tax (supra). Accordingly for the year under consideration also, we restore the matter to the file of the Assessing Officer for adjudication with the direction to decide the issue in view of the judgement of Jurisdictional High Court in the case of Maxopp Investment Ltd. and Ors. Vs. Commissioner of Income Tax(supra). Accordingly, this ground of appeal is allowed for statistical purposes. 15. Respectfully following the same, we restore the issue to the AO with directions as above and we allow Ground No. 2 for statistical purposes. 16. Ground No. 3 and additional ground raised by the assessee relates to Revenue Derecognition in accounts. Brief facts of the case are that for AY 2005-06, the Assessee claimed deduction in respect of interest of Rs. 54,13,48,468/- accrued on classified NPAs according to the guidelines of National Housing Bank ('NHB') issued with effect from 31st March, 2005. In the said guidelines, the debts or loan in respect of which interest had not been received beyond a period of more than 90 days were classified as NPA. Relying on the said guidelines, deduction was claimed by HUDCO. 17. The ....
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....ubstituted in place of the order under challenge. Reliance in this regard is placed on Kunhayammed vs. State of Kerala, [2000] 245 ITR 360 (SC) [@para 44] and Khoday Distilleries Ltd. vs. Mahadeshwara Sahakara Sakkare Karkhane Ltd, [2019] 262 Taxman 279 (SC) [@para 27]. 3. Order of the Hon'ble Supreme Court in Commissioner of Income tax v. Vasisth Chay Vyapar Ltd, [2019] 410 ITR 244 (SC) ("Vashisht Chai Vvapar (SC)") Now, before we proceed further let us have a look at the order of the Hon'ble Supreme Court dated 13-12-2017. Now, let us look at the judgement of Hon'ble Delhi High Court in Housing & Urban Development Corporation Ltd. vs. Additional Commissioner of Income tax, Range-12, [2017] 396 ITR 667 (Delhi) ("HUDCO") @ Page 9. @ Para 21.1 and @ Para 21.2. The Hon'ble High Court succinctly captured the legal position. The reference to Commissioner of Income tax v. Vasisth Chay Vyapar Ltd, [2011] 330 ITR 440 (Delhi) ("Vashisht Chai Vyapar (Delhi)") was noted in the right perspective which was upheld by the Hon'ble Supreme Court in Vasisth Chay Vyapar (SC) (supra). However, the Hon'ble High Court misdirected itself in equating the....
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....). Having section 30A of the NHB Act now been amended to give the power to RBI instead of NHB, the issue should stand settled on the lines of principle affirmed by the Hon'ble Supreme Court in Vashish Chay Vyapar (SC) (supra). 7. Alternatively, Section 43D only prescribes the amount to be recognized As a demurrer, even if it is unequivocally urged that section 36 read with section 30A of the NHB Act does not override the IT Act, even section 43D of the IT Act prescribes to recognize only as much income as it is credited to 'profit/loss account'. How much is to be credited to 'profit and loss account' is to be determined by the guidelines issued by NHB pursuant to section 30A read with section 36 of the NHB Act. 8. The Judgement of the Hon'ble Delhi High Court in HUDCO (supra) is sub silentio on the issue of Revenue Neutrality. It is submitted that the Hon'ble Delhi High Court in HUDCO (supra) did not consider the issue of revenue neutrality and therefore, as per the principles of doctrine of sub silentio the judgement does not hold any precedential value with regard to the issue of revenue neutrality. Reliance in this regard is....
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....e Id AR submitted before us that though the said income accrued to the assessee in AY 2005-06, TDS on the said income was deducted in the next AY 2006-07. Since the TDS was deducted in the next A.Y 2006-07, the assessee reversed the said income declared in A.Y 2005-06 and declared it in A.Y 2006-07 only for the purpose of matching the TDS. 22. We have heard the rival submissions and have perused the relevant material on record. We find that the income from Bonds were initially offered in AY 2005-06 but was revised by offering the same in AY 2006-07 for the reason that the tax was deducted in FY 2005-06 relevant to AY 2006-07. We find that ultimately the income from the Bonds of AP Power Corporation Ltd of Rs 54,00,000/- has been offered for taxation in AY 2006-07. We accordingly allow the assessee appeal in this ground. 23. Ground No. 5 relates to the benefit of Incremental Special Reserve u/s 36(1)(viia)(c) & 36(1)(viii) on the additions/disallowances made by the assessing officer. 24. We find that the co-ordinate bench in ITA No. 3261/DEL/2015 for AY 2010-11 vide order dated 04.11.2024 has considered and decided this issue as under: "This issue is consequential ....
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....ly following the same, Ground No. 3 being Revenue derecognition in accounts is dismissed. 33. Ground No. 4 has been discussed and decided by us while dealing Ground No. 5 hereinabove. Facts and circumstances being identical, respectfully following the same, Ground No. 4 being benefit of incremental special reserve u/s 36(1)(viia)(c) and 36(1)(vii) of the Act is allowed for statistical purposes. 34. In the result, the appeal of the assessee is partly allowed for statistical purposes. ITA No. 7628/DEL/2018 [A.Y. 2008-09] [Assessee's Appeal] 35. Ground No. 1 has been discussed and decided by us while dealing Ground No. 1 hereinabove. Facts and circumstances being identical, respectfully following the same, Ground No. 1 being prior period expenses is allowed for statistical purposes. 36. Ground No. 2 has been discussed and decided by us while dealing Ground No. 3 hereinabove. Facts and circumstances being identical, respectfully following the same, Ground No. 3 being Revenue derecognition in accounts is dismissed. 37. Ground No. 3 has been discussed and decided by us while dealing Ground No. 5 hereinabove. Facts and circumstances being identical, respectfully follo....