HOUSING AND URBAN DEVELOPMENT CORPORATION LIMITED vs. ADDITIONAL COMMISSIONER OF INCOME TAX RANGE 12 NEW DELHI
What did the High Court hold?
The Tribunal held that while the principle that prior period income and its related expenditure should be treated in the same year is correct, the assessee failed to substantiate its claim for the expenditure of Rs. 4,26,772/-. The Commissioner of Income Tax (Appeals) had provided an opportunity to the appellant to furnish proof, but the assessee did not adduce the requisite evidence, such as supporting vouchers or bills. The Tribunal observed that no documents were filed by the appellant in relation to its claim. Consequently, the CIT(A) was justified in rejecting the appellant's ground of appeal concerning this expenditure. The Tribunal found no error of law in rejecting the appellant's appeal. The appeal was dismissed as it did not involve any substantial question of law.
What were the facts?
The appellant, Housing and Urban Development Corporation Limited, a public sector undertaking, appealed against an order dated 04.11.2024 passed by the Income Tax Appellate Tribunal (Tribunal) in ITA 3262/Del/2015. The appellant had offered prior period income for tax in the assessment year under consideration. However, the Assessing Officer (AO) disallowed a deduction of Rs. 4,26,772/- claimed for expenditure related to prior period payments. The appellant argued that if prior period income is assessed, the corresponding expenditure should also be allowed as a deduction. The Commissioner of Income Tax (Appeals) [CIT(A)] had previously given the appellant an opportunity to substantiate this claim with proof, but the assessee failed to provide the necessary evidence. The Tribunal also noted that no documents were filed by the appellant to support its claim.
What were the issues?
1. Whether, as a matter of law, the Assessing Officer was justified in refusing to allow a deduction for prior period expenditure of Rs. 4,26,772/- when prior period income related to this expenditure was offered for tax in the relevant assessment year? Assessee's Contention: The appellant argued that if prior period income is assessed in a particular year, it is incumbent upon the Assessing Officer to allow the deduction of the corresponding expenditure as well. The principle is that income and its related expenses should be treated in the same assessment year. Revenue's Contention: The revenue did not explicitly record arguments in the judgment. However, the findings of the CIT(A) and the Tribunal indicate that the revenue's position, as accepted by the lower authorities, was that the expenditure was not deductible due to lack of substantiation.
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R %
2026
By way of present appeal, the appellant, a public sector undertaking, has challenged the order dated 04.11.2024 passed by the Income Tax Appellate Tribunal (hereinafter referred to as ‘the Tribunal’) in ITA 3262/Del/2015. 2. Learned counsel for the appellant invited Court’s attention towards page 146 of the paper-book being part of the Tax Audit Report and submitted that pursuant to tax Audit Report, prior period income of the assessee was offered for tax in the year under consideration by the appellant but when it came to allowance of expenditure of Rs.4,26,772/- in relation to prior payment/expenditure, the Assessing officer (AO) refused to give deduction of such expenditure by observing that prior period expenditure This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/04/2026 at 13:03:52
cannot be allowed.
Learned counsel for the appellant argued that if the prior period income has been assessed in the relevant Assessment Year(AY) it was incumbent upon the AO to allow deduction of the corresponding expenditure as well.
On principle, what learned counsel for the appellant has argued is correct that if the prior period income is being assessed in a particular year, the expenditure in relation thereto are also required to be deducted. But on perusal of the record, more particularly, paragraph No. 6.4 of the order of the Commissioner of Income Tax (Appeals) [CIT(A)], we find that the CIT(A) had given an opportunity to the appellant to substantiate the claim by furnishing proof, but the assessee has failed to adduce requisite evidence.
We find that in the impugned order, even the Tribunal has observed that no document in relation to its claim was filed by the appellant.
Considering that the appellant-assessee has not produced any evidence in support of its contention that an amount of Rs.4,26,772/- was spent, by way of producing supporting vouchers, bills etc., the CIT(A) was justified in rejecting the appellant’s ground No.3 of the appeal. The Tribunal has thus, committed no error of law in rejecting the appellant’s appeal.
As an upshot of discussion foregoing, the present appeal which does not involve any substantial question of law, is hereby dismissed along with pending applications. DINESH MEHTA, J VINOD KUMAR, J APRIL 27, 2026/ss This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/04/2026 at 13:03:52
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