DCIT CC 7(2), MUMBAI vs. GAMMON INDIA LTD, MUMBAI

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ITA 4492/MUM/2016Status: DisposedITAT Mumbai29 December 2017AY 2005-064 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s order, stating that the prior period expenses had already been allowed in AY 2004-05 by the ITAT. No incriminating material was found for the impugned assessment year to justify the disallowance.

What were the facts?

The Assessing Officer disallowed prior period expenses of Rs. 57,86,270/-. The assessee's appeal before the CIT(A) resulted in the deletion of this addition, as the CIT(A) found no new facts to justify the disallowance and followed previous ITAT and High Court decisions.

What were the issues?

Whether prior period expenses disallowed by the AO could be added when they were already allowed in a previous assessment year and no new incriminating material was found.

Which sections of the Income-tax Act were involved?

Section 153A,Section 143(3)

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Income Tax Appellate Tribunal, MUMBAI BENCH “H” MUMBAI

Before: SHRI D.T. GARASIA & SHRI N.K. PRADHAN

For Appellant: Mr. Vimal Modi, AR
For Respondent: Mr. Jasbir Chauhan, DR, Mr. Vimal Modi, AR
Hearing: 27/12/2017Pronounced: 29/12/2017

ORDER PER N.K. PRADHAN, A.M. This is an appeal filed by the Revenue. The relevant assessment year is 2005-06. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-47, Mumbai and arises out of the assessment completed u/s 143(3) r.w.s. 153A of the Income Tax Act 1961, (the ‘Act’). 2. The ground raised by the Revenue in this appeal is against the order of the Ld. CIT(A) deleting the addition of prior period expenses of Rs.57,86,270/-.

3. Briefly stated, the facts of the case are that in pursuance to the notice u/s 153A issued by the Assessing Officer (AO), the assessee M/s Gammon India Ltd. 139 may be treated as return u/s 153A. The AO completed the assessment u/s 143(3) r.w.s. 153A vide order dated 28.03.2013 making disallowance of prior period expenses of Rs.57,86,270/- and allowing depreciation on dumpers @ 25%. The total income thus determined by him was Rs.56,83,63,110/-.

4. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). It is observed by the Ld. CIT(A) that the ITAT has held the claim of prior period expenses of the assessee to be allowable in the year incurred, subject to verification by the AO. She found from the verification of the original assessment order that the AO had not brought any new fact on record for making the disallowance again. The Ld. CIT(A) followed the decision of the Hon’ble Bombay High Court in CIT vs. Murli Agro Products Ltd. (ITA No. 36 of 2009 dated 29.10.2010) and allowed the appeal filed by the assessee.

5. Before us, the Ld. DR submits that the Ld. CIT(A) failed to appreciate the order of the ITAT that the said expenditure be allowed in AY 2004-05 subject to verification and not in AY 2005-06. On the other hand, the Ld. counsel of the assessee relies on the order passed by the Ld. CIT(A).

6. We have heard the rival submissions and perused the relevant materials on record. We find that the ITAT ‘G’ Bench Mumbai in the case of the assessee for the AY 2004-05 (ITA No. 7430/Mum/2017) at para 29 and 30 held: “29. The assessee has also taken additional ground which is as under:

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