TaxTMI 
TaxTMI 
2025 (11) TMI 1891
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....the Act which is hereinafter referred to as the "Impugned order". The relevant Assessment Year is 2017-18 and the corresponding previous year period is from 01.04.2016 to 31.03.2017. 2. FACTUAL MATRIX 2.1 That as and by way of an intimation order u/s 143(3) of the Act, dated 21.12.2019, the assessee's total income exigible to tax was computed at Rs. 37,990/-. In para 8 of the aforesaid order following is recorded:- "8. Therefore considering the above facts remaining amount of Rs. 7,61,540/- (Rs. 10,04,045/ Rs. 2,42,505/-) claimed by the assessee in P& L A/c for the F.Y. 2016-17 hereby disallowed since these amount assessee paid in F.Y. 2015-16. so an amount of Rs. 7,61,540/- added to the total income of the assessee. Penalty ....
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....on of financial statements. Failure to adhere to this principle results in a distortion of taxable income for the relevant year. In the present case, the payment to contractors pertained to A.Y. 2016-17 but was neither claimed as an expense in that year nor recorded in the profit and loss account. The appellant's argument that the tax effect remains unchanged because of losses in both years is irrelevant, as income-tax law does not permit carrying forward expenditure or retroactively adjusting expenses in a subsequent year without a valid statutory mechanism. It is also noted that the assessment for A.Y. 2016-17 was completed under scrutiny and the same has attained finality. Apparently no action permissible under Income Tax Ac....
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....ater stage. However, no additional grounds or arguments were raised during the appellate proceedings. Therefore, no further adjudication is required on this ground. In light of the above, it is evident that the appellant has failed to substantiate its claims with adequate evidence or legal justification. The addition of Rs. 7,61,540/-made by the Assessing Officer under Section 143(3) of the Income-tax Act is upheld. Consequently, all grounds of appeal raised by the appellant are hereby dismissed. 6. Decision: As a result, the Appeal is dismissed". 2.3 That the assessee being aggrieved by the "impugned order" has preferred the instant second appeal before this Tribunal and has raised following grounds of appeal ....
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.... the parties mentioned therein in the aggregate comes to Rs. 7,53,885/-. In support of his plea the Ld. AR invited our attention to the paper book page 2 to 7 which are copies of the Form No.16A evidencing the TDS deduction of Rs. 7615/- in respect of parties mentioned on page 1 for the Assessment Year 2016-17. The relevant entries of "TDS" deducted were shown and demonstrated. It was also urged by the Ld. AR that there is a typographical error in respect of figures mentioned in page 1 of the paper book and internal page-6 of the "impugned assessment order" and there is a slight mismatch between the figure of Rs. 7615/- as TDS deducted on page 1 of paper book and figure of Rs. 6452/- appearing on page 6 of Ld. A.O's order. The Ld. AR then c....
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....e contended that the "impugned assessment order" of the Ld. A.O is correct in law and emphasized in para 7 of the "impugned assessment order" which is as under:- "7. As mentioned in above assessee has paid an amount of Rs. 7,61,540/- to contractor in F.Y.2015-16, whereas assessee has claimed this expenditure in F.Y.2016-17 which is not allowable since as per mercantile accounting method expenses are recognized when they accrue So an amount of Rs. 7,61,540/- debited by the assessee on the account of payment to contractors in Trading and Profit & Loss account for the F.Y 2016-17 is disallowed because same is treating prior expenses". The Ld. DR then contended that the mercantile year is of the importance and that the "impugned ord....
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....nfirm that the loss arising in AY 2016-17 (including loss of Rs. 7,61,500/- not debited in AY 2016-17 and debited in AY 2017-18) has been claimed in only subsequent eight years from AY 2016-17 and not thereafter. Submitted by Sd/- Deepak Agrawal (partner)" 4. Observations, findings & conclusions. 4.1 We now have to decide the legality, validity and the proprietery of the "impugned order" basis records of the case and contentions canvassed before us. 4.2 We have carefully perused the records of the case as presented to this Tribunal by both the Ld. AR & the Ld. DR to determine the legality, validity of the "impugned order" basis law and by following the due process. 4.3 We basis records of the case and ....