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Income Tax Appellate Tribunal, AHMEDABAD - BENCH ‘D’
Before: SHRI RAJPAL YADAV & SHRI AMARJIT SINGH
आयकर अपील�य अ�धकरण, अहमदाबाद �यायपीठ - अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH ‘D’
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No.2182/Ahd/2016 �नधा�रण वष�/Asstt. Year: 2013-2014 DCIT, Cir.2(1)(1) Vs. Gobind Glass & Industries Ltd. Ahmedabad. Gopal Glass House, 26 Govt. Servant Society Navrangpura Ahmedabad 380 009.
अपीलाथ�/ (Appellant) �त् यथ�/ (Respondent)
Revenue by : Shri V.K. Singh, Sr.DR Assessee by : None
सुनवाई क� तार�ख/Date of Hearing : 26/06/2018 घोषणा क� तार�ख /Date of Pronouncement: 09/07/2018 आदेश/O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER:
Revenue is in appeal before the Tribunal against order of the ld.CIT(A)-2, Ahmedabad dated 7.6.2016 passed for the assessment year 2013-14.
In response to the notice of hearing none has come present on behalf of the assessee. This appeal was listed for hearing on 20.3.2018. The assessee under the signature of authorized signatory filed an application. At the time of hearing, one Shri Pamil Shah appeared on behalf of the assessee and hearing was adjourned. Thereafter neither any power of attorney was filed nor any paper book has been filed by the assessee. The date was announced in the open
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Court on 26.6.2018. But on this date also no one appeared on behalf of the assessee. Therefore, we proceed to decide the appeal of the Revenue ex parte qua the assessee.
Sole grievance of the Revenue is that the ld.CIT(A)has erred in deleting disallowance of gas transmission and consumption charges amounting to Rs.95,76,407/-.
With the assistance of the ld.DR, we have gone through the record carefully. It emerges out from the record that the assessee has filed its return of income on 29.9.2013 declaring total income at NIL. On verification of the profit & loss account it came to the notice of the AO that the assessee has debited a sum of Rs.1,35,76,968/- under the head “Gas Transmission and Consumption charges”. He further found that out of total amount a sum of Rs.95,76,407/- relates to prior period – December 2009 to March, 2012. The ld.AO has disallowed this amount by observing that it relates to prior period and the assessee has not made any provision for it. Dissatisfied with the disallowance the assessee carried the matter in appeal before the ld.CIT(A). It has filed written submissions which has been reproduced by the ld.CIT(A). The ld.CIT(A) gone though the record and thereafter deleted disallowance by recording following finding:
“I have carefully considered the facts of the case, the assessment order and the written submission of the appellant. The AO has made the disallowance of Rs. 95,76,407/- under the Head of Gas Transmission and Consumption charges which was stated to be pertaining to earlier years i.e. December, 2009 to March, 2012. The AO disallowed the same treating them prior period expenses. The AO observed that the aforesaid payment to GAIL India Ltd. had not been provided for in the books of account for F.Y. 2009- 10, 201 0-11 and 2011-12 and had not been shown payable in that year. Thus, the same could not be claimed in the year under consideration.
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2.4. On the other side, in the assessment proceedings the appellant submitted the details of the aforesaid expenses such as gas transportation commitment charges account, copy of bill of GAIL India Ltd. dtd. 15-02-2013 and details of gas sales and transportation commitment charges working dtd. 10-02-2013 given by the GAIL India Ltd. The appellant has also submitted to the AO that the above amount was crystallized in the year under consideration on 15-02-2013 as per the bill of GAIL India Ltd. received by the appellant in the year under consideration. Further, the working of the transmission charges as per the new contract dtd. 08-03-201 1 for different years as an arrear was also submitted in the year under consideration on 12-02-2013. So the liability to pay the arrears crystallized as per the bills submitted by GAIL India Ltd. dtd. 15-02-2013 in the year under consideration. In the bill itself, the period has been mentioned as September, 2009 to February, 2013.
2.5 Having considered , the facts and submissions, it is noticed that the GAIL India Ltd. has raised the bill in the year under consideration on 1 5-02-2013, thus the crystallization of the liability is obviously arised in the year under consideration and therefore the same could not be said to be prior period expenses.. It is also needless to mention that by postponing the claim of expenses of the earlier year would in no way helps the appellant to reduce its tax liability in the year under consideration. Thus, as per the mercantile method of accounting followed by the appellant the aforesaid expenditures deserves to be allowed in the year under consideration since crystallization of the payment of the aforesaid liability has arisen only in the year under consideration although the same were pertaining to earlier years. Therefore, the disallowance of the claim of expenses made by the AO is found not to be in accordance with the provisions of law and hence same is deleted.”
The ld.DR relied upon the order of the AO.
We have gone through the finding of both the authorities. It is pertinent to note that GAIL (India) Ltd. has raised invoices during the accounting year relevant to this assessment year. The ld.CIT(A) has recorded a categorical finding that expenditure was crystalised in the year under consideration i.e. on 15.2.2013 when GAIL (India) Ltd. raised the bill. The ld.CIT(A) also observed that some of the
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expenditure could not be ascertained earlier because new contract determining the transmission charges was entered on 8.3.2011 relating to different years showing that there would be certain arrears. Thus, we are of the view that the ld.CIT(A) has examined the facts in right perspective and thereafter rightly concluded that the liability to pay has been crystalised in the accounting year relevant to this assessment year, and therefore, expenditure cannot be disallowed. We do not find any merit in this appeal. It is dismissed.
In the result, appeal of the Revenue is dismissed.
Order pronounced in the Court on 9th July, 2018 at Ahmedabad.
Sd/- Sd/- (AMARJIT SINGH) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER