M/s Hindustan Shipyard Ltd, Visakhapatnam V. The Addl. CIT, Range-3, Visakhapatnam., Visakhapatnam

ITA 103/VIZ/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94107 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 09-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G GURUSAMY
• Keywords: Depreciation
• Section: 43B; 260A; 37(1)

Judgement Text

ITA NOS.102, 103, 107 & 108/VIZAG/2012 HINDUSTAN SHIPYARD LTD., VSKP IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B.R. BASKARAN , ACCOUNTANT MEMBER ITA NOS.102&103/VIZAG/2012 ASSESSMENT YEARS : 2007-08 & 2008-09 HINDUSTAN SHIPYARD LTD. VISAKHAPATNAM VS. ADDL. CIT RANGE-3 VISAKHAPATNAM (APPELLANT) (RESPONDENT) PAN NO.AAACH 4275P ITA NOS.107&108/VIZAG/2012 ASSESSMENT YEARS : 2007-08 & 2008-09 DCIT CIRCLE-3(1) VISAKHAPATNAM VS. HINDUSTAN SHIPYARD LTD. VISAKHAPATNAM (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI G.V.N. HARI, ADVOCATE REVENUE BY: SHRI G. GURUSAMY, CIT(DR) DATE OF HEARING : 23.07.2015 DATE OF PRONOUNCEMENT : 28.07.2015 ORDER PER D. MANMOHAN, VICE PRESIDENT:- THESE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER S PASSED BY CIT(A), VISAKHAPATNAM AND THEY PERTAIN TO THE ASSESSMENT YE ARS 2007-08 AND 2008- 09. ISSUES INVOLVED IN BOTH THE YEARS BEING COMMON, WE PROCEED TO DISPOSE OF THESE APPEALS BY A COMBINED ORDER FOR THE SAKE O F CONVENIENCE. IN THE APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEA R 2007-08, FOLLOWING GROUND WAS URGED BEFORE US: APPELLANT SUBMITS THAT THE COMMISSIONER OF INCOME TA X (APPEALS) IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF ASSESS ING OFFICER PARTIALLY, IN DISALLOWING FOLLOWING AMOUNTS OUT OF VARIOUS ITE MS INCLUDED UNDER PRIOR PERIOD EXPENSES. ITA NOS.102, 103, 107 & 108/VIZAG/2012 HINDUSTAN SHIPYARD LTD., VSKP 2 1 INTEREST ON GOVERNMENT OF INDIA LOANS RS.3,775.50 LAKHS 2 GOVERNMENT GUARANTEE FEE RS.3,699.17 LAKHS 3 ARBITRATION AWARD RS.207.50 LAKHS 4 INTEREST RS.8.94 LAKHS 5 PAY & BENEFITS RS.69.39 LAKHS 6 TAXES RS.8.21 LAKHS 7 REPAIRS & MAINTENANCE RS.7.16 LAKHS 8 POWER & FUEL RS.3.01 LAKHS 9 DEPRECIATION RS.0.05 LAKHS 10 OTHERS RS.49.54 LAKHS 2. THE ASSESSEE COMPANY IS A PUBLIC SECTOR UNDERTAK ING ENGAGED IN THE BUSINESS OF CONSTRUCTION AND REPAIRS OF OCEAN GOING VESSELS. FOR THE YEAR UNDER CONSIDERATION, IT FILED ITS RETURN OF INCOME DECLARING A LOSS OF RS.115 CRORES. DURING THE COURSE OF SCRUTINY ASSESSMENT P ROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE CLAIMED EXPENDITU RE PERTAINING TO EARLIER YEARS IN THE YEAR UNDER CONSIDERATION. IT APPEARS T HAT THIS PROCEDURE WAS FOLLOWED CONSISTENTLY OVER THE YEARS. THE CASE OF THE ASSESSEE WAS THAT IT CATEGORISED CERTAIN INCOMES AS WELL AS EXPENDITURE UNDER THE HEAD PRIOR PERIOD ADJUSTMENTS AND THE NET AMOUNT WAS EITHER D EBITED OR CREDITED TO THE PROFIT & LOSS ACCOUNT OF THE COMPANY. FOR EXAMPLE IN THE FINANCIAL YEAR 2006-07 (PAGE 33 OF ANNUAL REPORT) THE ASSESSEE DEC LARED PRIOR PERIOD INCOME OF RS.123.40 LAKHS AND ADJUSTED THE PRIOR PE RIOD EXPENDITURE OF RS.38,616.46 LAKHS WHICH RESULTED IN NET EXPENDITUR E OF RS.38,739.86 LAKHS WHICH WAS REDUCED FROM THE PROFIT OF THIS YEAR. SI MILAR PROCEDURE IS FOLLOWED FROM YEAR TO YEAR. IT WAS ALSO SUBMITTED THAT GOVER NMENT OF INDIA HAD APPROVED A CAPITAL RESTRUCTURING PACKAGE, WHICH ENV ISAGES WRITE OFF OF GOVERNMENT OF INDIA LOANS AND INTEREST THEREON. AS PER THE GOVERNMENT OF INDIA LETTER, THE HSL HAD BROUGHT THE EFFECT OF CAPI TAL RESTRUCTURING IN ITS BOOKS IN THE YEAR 2006-07 AS A PRIOR PERIOD ADJUSTM ENT. SIMILAR EXPLANATION IS GIVEN WITH REGARD TO THE INTEREST OF GOI LOANS, GOVERNMENT GUARANTEE FEES, ETC. IT MAY BE NOTICED THAT THE ASSESSEE HAVING NOT SPECIFICALLY MENTIONED THAT THE PRIOR PERIOD INCOME WAS ALSO IMPLIEDLY OFF ERED TO TAX, BY VIRTUE OF THE METHOD FOLLOWED BY IT, THE ASSESSING OFFICER HAD NO OCCASION TO CONSIDER THE TAXABILITY OF PRIOR PERIOD INCOME. HE MERELY OBSER VED THAT THERE IS NO PROVISION IN THE ACT FOR CLAIMING PRIOR PERIOD EXPE NDITURE IN THE SUBSEQUENT YEARS AND ACCORDINGLY HE DISALLOWED THE CLAIM OF TH E ASSESSEE. LD. CIT(A) ITA NOS.102, 103, 107 & 108/VIZAG/2012 HINDUSTAN SHIPYARD LTD., VSKP 3 ACCEPTED THE VIEW OF THE ASSESSING OFFICER AND IN T HIS REGARD OBSERVED THAT ONLY NET PRIOR PERIOD EXPENDITURE WAS OFFERED TO TA X BECAUSE THE TOTAL EXPENDITURE MINUS THE PRIOR PERIOD INCOME OFFERED T O TAX WAS SHOWN AS EXPENDITURE. HE ALSO OBSERVED THAT WAIVER OF GOI LO ANS, INTEREST AND GUARANTEE FEES ARE ITEMS RELATED TO GOVERNMENT REST RUCTURING PLAN. THIS PROPOSAL WAS MOVED IN THE YEAR 2004-05. GOVERNMEN T OF INDIA HAS NOT YET ACCEPTED THE PROPOSAL FOR WRITE OFF. NO PROVISION IS MADE TOWARDS THESE EXPENSES IN THE ACCOUNTS IN THE RESPECTIVE YEARS, P ENDING APPROVAL OF THE FINANCIAL RESTRUCTURING PROPOSAL. THE LD. CIT(A) A LSO NOTED THAT MERE DISCLOSURE IN THE NOTES OF ACCOUNT IS NOT SUFFICIEN T TO MEET THE REQUIREMENT OF REFLECTING THE FAIR VIEW OF THE STATE OF AFFAIRS OF THE COMPANY. HE THUS CONCLUDED THAT NONE OF THE EXPENDITURE IS RELATED T O THE YEAR UNDER CONSIDERATION AND IN FACT THE AMOUNT IS SHOWN AND C RYSTALISED EARLIER, BASED ON MERCANTILE SYSTEM OF ACCOUNTING, AND IT WAS MADE PART OF THE ACCOUNTS OF THE RESPECTIVE YEARS, BY INSERTING A SEPARATE NOTE IN THE ANNUAL REPORT EVERY YEAR. THEREFORE THIS EXPENDITURE CAN NEITHER BE SA ID TO PERTAINING TO THIS YEAR NOR CRYSTALISED DURING THE YEAR UNDER CONSIDERATION . HE THUS CONFIRMED THE ACTION OF THE ASSESSING OFFICER. SIMILARLY, WITH R EGARD TO THE ARBITRATION AWARD, IT IS NOT AN EXPENDITURE PERTAINING TO THIS YEAR SINCE THE AWARD WAS RECEIVED DURING THE FINANCIAL YEAR 2004-05 AND EVEN IF THE MATTER IS CONTESTED, IT CANNOT BE SAID TO HAVE CRYSTALISED IN THIS YEAR. IN FACT THE ASSESSEE ITSELF TREATED IT AS A CONTINGENT LIABILIT Y. HE THEREFORE AFFIRMED THE ACTION OF THE ASSESSING OFFICER. 3. SIMILARLY, THE ASSESSEE DEBITED A SUM OF RS.440 LAKHS UNDER THE HEAD TAXES REFERABLE TO SALES TAX PAYABLE. THE COMPANY APPROACHED A.P. GOVERNMENT FOR CONCESSION IN LEVY OF TAX UPTO 31.03 .1999. THIS REQUEST WAS REJECTED BY THE GOVERNMENT. HOWEVER, WITH THE INTE RVENTION OF MINISTER OF STATE FOR SHIPPING, THE ASSESSEE COMPANY SUBMITTED A PROPOSAL FOR PAYMENT OF RS.5 CRORES AS FULL AND FINAL SETTLEMENT I.E. A ONE TIME SETTLEMENT. THIS PROPOSAL IS PENDING WITH THE A.P. GOVERNMENT. ASSE SSEE DID NOT DEBIT THIS LIABILITY IN THE BOOKS IN THE EARLIER YEARS. WHEN IT WAS POINTED OUT IN THE GOVERNMENT AUDIT, THE SAME WAS PROVIDED IN THE BOOK S. THE CASE OF THE ITA NOS.102, 103, 107 & 108/VIZAG/2012 HINDUSTAN SHIPYARD LTD., VSKP 4 ASSESSEE IS SALES TAX LIABILITY IS COVERED BY THE P ROVISIONS OF SECTION 43B OF THE ACT AND THEREFORE DISALLOWANCE OF RS.4.32 CRORE S WAS MADE WHILE COMPUTING THE INCOME AS PER THE I.T. ACT IN WHICH EV ENT FURTHER DISALLOWANCE WOULD RESULT IN DOUBLE ADDITION. LD. CIT(A) CONSID ERED THE ISSUE. HE OBSERVED THAT THE EXPENDITURE WAS NOT CRYSTALISED D URING THE YEAR UNDER CONSIDERATION. HOWEVER, SINCE AN AMOUNT OF RS.4.32 CRORES WAS ALREADY DISALLOWED THE ADDITION WAS RESTRICTED TO RS.8.21 L AKHS. SIMILARLY IN THE CASE OF OTHER EXPENDITURE THE LD. CIT(A) OBSERVED THAT T HE EXPENDITURE HAS NOT BEEN CRYSTALISED DURING THE YEAR UNDER CONSIDERATIO N. 4. AGGRIEVED, ASSESSEE CONTENDED BEFORE US AND BOTH THE INCOME AND EXPENDITURE OF THE PRIOR PERIOD WAS TAKEN INTO CONS IDERATION IN THIS YEAR AND WHEN THE EXPENDITURE HAS TO BE DISALLOWED THE INCOM E ALSO SHOULD NOT HAVE BEEN TAKEN INTO CONSIDERATION SINCE IT PERTAINS TO THE PRIOR YEAR. IN THIS REGARD, HE RELIED UPON THE ORDER OF THE ITAT VISAKH APATNAM IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2002-03, WHERE THE BENCH OBSERVED AS UNDER: THE ASSESSING OFFICER HAS ACCEPTED THE PRIOR PERIOD INCOME IN THIS YEAR BUT DISALLOWED THE PRIOR PERIOD EXPEND ITURE. THIS ACTION OF THE ASSESSING OFFICER IS NOT PROPER AS HE HAS TO TAKE INTO THE ACCOUNT THE STATUS AS A WHOLE AND NOT TO MAKE A PIC K AND CHOOSE. 5. WE HAVE ALSO HEARD THE LD. D.R. AND CAREFULLY PE RUSED THE RECORD. THE FACTS CLEARLY SHOW THAT THE EXPENDITURE CLAIMED AS DEDUCTION DO NOT PERTAIN TO THIS YEAR; EITHER IT WAS NOT CRYSTALISED OR IT PERTAINS TO THE EARLIER YEARS. THEREFORE, THE TAX AUTHORITIES WERE JUSTIFI ED IN NOT ALLOWING THE CLAIM OF DEDUCTION. HOWEVER, THE ASSESSING OFFICER HAVIN G IMPLIEDLY ACCEPTED THE PRIOR PERIOD INCOME, IT AMOUNTS TO ADOPTING A PICK AND CHOOSE METHOD OF ACCEPTING THE PRIOR PERIOD INCOME WHILE DISALLOWING PRIOR PERIOD EXPENDITURE. WE THEREFORE DIRECT THE ASSESSING OFFICER TO RECONS IDER THE CLAIM OF THE ASSESSEE WITH REGARD TO THE PRIOR PERIOD INCOME; NE EDLESS TO OBSERVE THAT IF THE AMOUNTS SHOWN AS PRIOR PERIOD INCOME ARE NOT CR YSTALISED DURING THIS YEAR OR IT SPECIFICALLY PERTAINS TO THE EARLIER YEARS, I T CANNOT BE BROUGHT TO TAX. A.O. IS DIRECTED ACCORDINGLY. WITH THESE OBSERVATI ONS, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR THE ASSESSMENT YEAR 2007-08. ITA NOS.102, 103, 107 & 108/VIZAG/2012 HINDUSTAN SHIPYARD LTD., VSKP 5 6. IN THE DEPARTMENTAL APPEAL, THE MAIN GROUND OF TH E REVENUE IS THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF DEMURRAGE CHARGES. THE CASE OF THE REVENUE IS THAT THE CHARG ES PAID WERE IN THE FORM OF INFRACTION OF LAW AND THEREFORE NOT ALLOWABLE AS DEDUCTION IN VIEW OF EXPLANATION TO SECTION 37(1) OF THE ACT. IN THIS RE GARD, THE LD. CIT(A) OBSERVED AS UNDER:- THESE CHARGES ARE IN THE NATURE OF LATE PAYMENTS/DE TENTION CHARGES PAID TO FREIGHT FORWARDERS AND CLEARING AGE NTS FOR KEEPING THE GOODS BEYOND PRESCRIBED TIME IN THE RESPECTIVE PORTS. NONE OF THESE ARE PENALTIES FOR VIOLATION OF LAW OF LAND. FROM THE DETAILS OF DEMURRAGE CHARGES PAYMENTS IT IS SEEN THAT NONE OF THESE PAYMENTS IS MADE TO ANY GOVERNMENT AGENCY AND HENCE THE SAME IS IN THE NATURE OF NON FULFILLMENT OF CONTRACTUAL OBLIGATIONS TO WHICH THE EXPLANATION TO 37(1) DOES NOT APPLY. IN VIEW O F THE ABOVE I HOLD THAT DEMURRAGE CHARGES CLAIMED BY THE ASSESSEE IS AN ALLOWABLE EXPENDITURE AND HENCE ASSESSING OFFICER I S DIRECTED TO ALLOW THE SAME. NOTHING WAS BROUGHT ON RECORD BY THE REVENUE TO SH OW THAT IT WAS IN THE NATURE OF PENALTY. UNDER THESE CIRCUMSTANCE S, WE CONFIRM THE ORDER OF THE LD. CIT(A) AND REJECT GROUND NO.2 OF T HE REVENUE. 7. VIDE GROUND NO.3, THE ASSESSEE CONTENDS THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.2.16 CRORES. ACCORD ING TO THE ASSESSING OFFICER, IT IS A PRIOR PERIOD EXPENDITURE WHICH CAN NOT BE CLAIMED AS DEDUCTION IN THE YEAR UNDER CONSIDERATION. THE CAS E OF THE ASSESSEE, ON THE OTHER HAND, WAS THAT THE LIABILITIES CREATED WE RE BASED ON ESTIMATED EXPENDITURE IN THE RESPECTIVE YEARS AS THE BILLS SU BMITTED BY VARIOUS AGENCIES ARE NOT CERTIFIED BY VARIOUS DEPARTMENTS I N THE ASSESSEE COMPANY, DUE TO DELAY IN VERIFICATION OF VARIOUS WO RK ORDERS, QUALITY CHECK, ETC. ASSESSEES CONTENTION IS THAT IT GOT C RYSTALISED ONLY DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. IN THIS REGARD, THE LD. CIT(A) OBSERVED AS UNDER:- IT IS BUT NATURAL THAT SOME OF THE APPROVALS/FINALI SATION ETC GET DELAYED AND SPILL OVER TO THE NEXT YEAR. THE S AID EXPENDITURE, THUS, CAN BE SAID TO BE CRYSTALISED DURING THE YEAR UNDER CONSIDERATION. THE DECISIONS CITED BY THE ASSESSEE ARE APPLICABLE TO THESE EXPENSES AS IT IS BEYOND THE CONTROL OF TH E ASSESSEE TO ITA NOS.102, 103, 107 & 108/VIZAG/2012 HINDUSTAN SHIPYARD LTD., VSKP 6 CLAIM THESE EXPENDITURES IN THE YEAR OF BILLING. A SSESSEE ALSO ADMITTED PRIOR PERIOD INCOME OF RS.1.21 CRORES ON A CCOUNT OF SHIP REPAIR. CONSIDERING ALL THESE ASPECTS IT IS HELD T HAT THE SAID EXPENDITURE HAVING BEEN CRYSTALISED DURING THE YEAR UNDER CONSIDERATION IS AN ALLOWABLE EXPENDITURE IN THE AS SESSMENT YEAR 2007-08. ASSESSING OFFICER IS THUS DIRECTED TO DEL ETE THE ADDITION MADE OF RS.216.66 LAKHS. 8. LD. D.R. DID NOT BRING ANY MATERIAL TO CONTRADIC T THE FINDINGS OF THE LD. CIT(A). WE THEREFORE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A) AND HENCE REJECT GROUND NO.3 OF THE REVENUE. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSE D. 9. IN RESPECT OF THE ASSESSMENT YEAR 2008-09 ALSO TH E CASE OF THE ASSESSEE IS THAT THE PRIOR PERIOD EXPENSES REFERABL E TO REPAIRS AND MAINTENANCE, POWER AND FUEL, INTEREST ETC. OUGHT TO HAVE BEEN ALLOWED IN THE YEAR UNDER CONSIDERATION SINCE IT WAS CRYSTALIS ED IN THIS YEAR. LD. CIT(A) OBSERVED THAT THE ASSESSEE HAS NOT FURNISHED ANY EXPLANATION EITHER DURING THE ASSESSMENT PROCEEDINGS OR DURING THE APPELLATE PROCEEDINGS AND NO DETAILS AS TO WHY THESE EXPENSES WERE CLAIMED IN THIS YEAR WAS PLACED ON RECORD. HE THEREFORE AFFIRMED T HE VIEW TAKEN BY THE ASSESSING OFFICER AND HELD THAT PRIOR PERIOD EXPEND ITURE CANNOT BE ALLOWED AS DEDUCTION IN THIS YEAR. EVEN BEFORE US THE LD. COUNSEL COULD NOT PLACE ANY MATERIAL TO SUBMIT THAT THE PRIOR PERIOD EXPEND ITURE IS ALLOWABLE IN THE YEAR UNDER CONSIDERATION. HOWEVER, HE MADE AN ALTE RNATIVE SUBMISSION THAT BOTH PRIOR PERIOD INCOME AND PRIOR PERIOD EXPE NDITURE WAS SHOWN IN THE ANNUAL REPORTS AND ONLY THE NET FIGURE WAS TAKE N INTO CONSIDERATION IN THE BOOKS OF ACCOUNT; IF THE PRIOR PERIOD EXPENDITU RE IS DISALLOWED ON THE GROUND THAT IT DOES NOT PERTAIN TO THIS YEAR, THE A SSESSING OFFICER CANNOT BLOW HOT AND COLD AND ACCEPT THE PRIOR PERIOD INCOM E AS PERTAINING TO THIS YEAR. IN SHORT HIS CONTENTION IS THAT EVEN PRIOR PE RIOD INCOME SHOULD BE EXCLUDED IF IT IS NOT CRYSTALISED IN THIS YEAR. SI MILAR ISSUE WAS CONSIDERED BY US IN THE APPEAL FOR THE ASSESSMENT YEAR 2007-08 . FOR THE REASONS GIVEN THEREIN, WE UPHOLD THE ORDER OF THE CIT(A) WI TH REGARD TO PRIOR PERIOD EXPENSES BUT DIRECT THE ASSESSING OFFICER TO CONSIDER THE PLEA OF THE ITA NOS.102, 103, 107 & 108/VIZAG/2012 HINDUSTAN SHIPYARD LTD., VSKP 7 ASSESSEE WITH REGARD TO THE PRIOR PERIOD INCOME. I N THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS PARTLY ALLOWED. 10. IN THE APPEAL FILED BY THE REVENUE THE FOLLOWING ARE THE EFFECTIVE GROUNDS. (GROUND NOS. 1 & 4 ARE GENERAL IN NATURE) : 2. FURTHER, THE ORDER OF LD. CIT(A) DIRECTING THE ASSE SSING OFFICER TO DELETE THE ADDITION MADE ON ACCOUNT OF DEMURRAGE CH ARGES IS NOT BASED ON ANY JUDICIAL PRECEDENT. 3. THE LD. CIT(A) HAS DELETED ADDITION MADE OF 3.76 CR ORE PERTAINING TO PRIOR PERIOD EXPENSES RELYING ON THE CASE LAW IN THE CASE OF M/S. JAY ENGINEERING WORKS LTD. AND JURISDICTIONAL ITAT S DECISION IN THE CASE OF THE ASSESSEE FOR THE ASST. YEAR 2002-03. H OWEVER, AN APPEAL HAS BEEN FILED U/S 260A OF THE ACT AGAINST T HE AFORESAID DECISION OF THE JURISDICTIONAL ITAT AND THE SAME I S PENDING BEFORE THE HONBLE HIGH COURT. 11. BOTH THE PARTIES ADMITTED THAT THE FACTS IN BOT H THE ISSUES ARE IDENTICAL TO THE ASSESSMENT YEAR 2007-08. FOR THE REASONS GIVEN THEREIN WE HOLD THAT DEMURRAGE CHARGES CANNOT BE CONSIDERED AS IN THE NATURE OF PENALTY AND HENCE THE SAME SHOULD BE ALLOWED AS DED UCTION U/S 37(1) OF THE ACT. SO FAR AS THE PLEA OF THE REVENUE THAT A SUM OF RS.3.76 CRORES ARE RELATABLE TO PRIOR PERIOD EXPENSES, THE LD. CIT (A) OBSERVED THAT THE EXPENDITURE IS IDENTICAL TO THE EXPENDITURE CLAIMED IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007-08. IN OTHER WORD S, THE EXPENDITURE GOT CRYSTALISED IN THIS YEAR. FOR THE REASONS GIVE N BY US IN PARA-7 ABOVE, WE UPHOLD THE ORDER OF THE LD. CIT(A) AND REJECT GR OUND NO.3 OF THE REVENUE. IN THE RESULT, THE APPEAL FILED BY THE RE VENUE IS DISMISSED. 12. IN SUMMARY, THE APPEALS FILED BY THE ASSESSEE FO R BOTH THE YEARS ARE TREATED AS PARTLY ALLOWED , WHEREAS APPEALS FILED BY THE REVENUE FOR BOTH THE YEARS ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 28 TH JULY, 2015 SD/- SD/- (B.R. BASKARAN) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT VISAKHAPATNAM, DATED 28 TH JULY, 2015 VG/SPS ITA NOS.102, 103, 107 & 108/VIZAG/2012 HINDUSTAN SHIPYARD LTD., VSKP 8 COPY TO 1 M/S. HINDUSTAN SHIPYARD LIMITED, GANDHIGRAM, VISA KHAPATNAM-530 005. 2 THE ADDL. CIT, RANGE-3, VISAKHAPATNAM 3 THE DCIT CIRCLE-3(1), VISAKHAPATNAM 4 THE CIT, VISAKHAPATNAM 5 THE CIT(A), VISAKHAPATNAM 6 THE DR, ITAT, VISAKHAPATNAM. 7 GUARD FILE. BY ORDER ASST. REGISTRAR INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM