M/s Haryana Warehousing Corporation, Panchkula V. DCIT, Panchkula

ITA 1108/CHANDI/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9826 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-03-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 12-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B K NOHRIA
• Keywords: Charitable institution; Rule of consistency; Corroborative evidences; Valuation report; Assessment record
• Section: 6; 263; 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 1108/CHD/2014 ASSESSMENT YEAR: 2010-11 HARYANA WAREHOUSING CORPORATION, VS. THE DCIT, PANCHKULA PANCHKULA CIRCLE, PANCHKULA PAN NO. AAATH7428H & ITA NO. 226/CHD/2015 ASSESSMENT YEAR: 2011-12 HARYANA WAREHOUSING CORPORATION, VS. THE ITO, PANCHKULA WARD-3, PANCHKULA PAN NO. AAATH7428H (APPELLANT) (RESPONDENT) APPELLANT BY : SH. B.K.NOHRIA RESPONDENT BY : SH. MANOJ MISHRA DATE OF HEARING : 01.07.2016 DATE OF PRONOUNCEMENT : 01. 07.2016 ORDER PER BENCH THESE ARE APPEALS BY THE ASSESSEE AGAINST THE ORDE R OF LD. CIT(A), PANCHKULA DATED 14.10.2014 AND 31.12.2014 FOR ASSES SMENT YEARS 2010-11 AND 2011-12. 2 2. SINCE THE ISSUES ARE COMMON AND THE APPEALS WERE HEARD TOGETHER, THESE ARE BEING DISPOSED OF BY THIS COMMON ORDER. 3. THE COMMON ISSUE RAISED IS THAT CIT(A) ERRED IN UPHOLDING THE DISALLOWANCE OF PRIOR PERIOD EXPENSES DESPITE THE S UBMISSIONS OF ALL THE DETAILS OF PRIOR PERIOD EXPENSES. 4. SINCE FACTS ARE IDENTICAL, WE ARE ADJUDICATING T HE ISSUE WITH REFERENCE TO THE FACTS AND FIGURES FROM ASSESSMENT YEAR 2010-11. FOR ASSESSMENT YEAR 2011- 12 LD. CIT(A) HAS FOLLOWED HIS ORDER FOR ASSESSMENT YEAR 2010-11. THE ASSESSEE IN THIS CASE IS A PUBLIC SECTOR UNDERTAKING. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER MADE THE DISALLOWANCE OF EXPENSES BOOKED UNDER PRIOR PERIOD EXPENSES BY HOLDING AS UNDER:- 5 (I) DURING THE YEAR, THE ASSESSEE HAS CLAIMED P RIOR PERIOD EXPENSES AMOUNTING TO RS. 40589627/- IN THE P&L ACCOUNT, THE ASSESSEE WAS ASKED AS TO WHY THE SAME SHOULD NOT BE DISALLOWED AS THE EXPENSES DO NOT PERTAIN TO THE RELEVANT PREVIOUS YEAR. IN RESPONSE, IT HAS BEEN SUBMITTED B Y THE ASSESSEE THAT THESE EXPENSES HAVE ARISEN DURING THE YEAR. THE CONTENTIONS OF THE ASSESSEE ARE NOT ACCEPTED AS THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. IN VIEW OF THE FORGOING, PRIOR PERIOD EXPENSES WHICH DO NOT PERTAI N TO THE YEAR UNDER CONSIDERATION ARE DISALLOWED AND ADDITIO N OF RS. 40589627/- IS MADE TO THE INCOME OF THE ASSESSEE ON THIS ACCOUNT. (II) IN ADDITION TO THE ABOVE REFERRED PRIOR PERIOD EXPENSES DEBITED DIRECTLY IN THE P&L ACCOUNT DURING THE YEAR , THE ASSESSEE HAS ALSO MADE THE CLAIM OF PRIOR PERIOD EX PENDITURES IN THE PROCUREMENT OF WHEAT, PADDY AND BAJRA ACCOUN TS FROM WHICH NET SURPLUS OR DEFICIT HAS BEEN TAKEN TO THE P&L ACCOUNT, THE DETAILS OF PRIOR PERIOD EXPENSES SO CLAIMED ARE AS UNDER :- 3 EXPENDITURE CLAIMED UNDER PRIOR : RS. 56834748/- PERIOD ADJUSTMENT ACCOUNT OF WHEAT EXPENDITURE CLAIMED UNDER PRIOR : RS. 178322/- PERIOD ADJUSTMENT ACCOUNT OF PADDY EXPENDITURE CLAIMED UNDER PRIOR PERIOD : RS. 21 74/- ADJUSTMENT ACCOUNT OF BAJRA TOTAL : RS. 57015244/- WHEN QUESTIONED IN THIS REGARD, THE RESPONSE OF THE ASSESSEE HAS BEEN THAT LIABILITY TO PAY THESE EXPENSES HAS A RISEN DURING THE YEAR. THE CONTENTION OF THE ASSESSEE IS NOT ACC EPTED AS THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTI NG, NO SUPPORTING EVIDENCES THAT THE LIABILITY TO PAY AROS E ONLY IN THE RELEVANT PREVIOUS YEAR HAVE BEEN FURNISHED DESPITE QUERIES IN THIS REGARD. IN VIEW OF THE SAME AND THE FACT THAT PRIOR PERIOD EXPENSES DO NOT PERTAIN TO THE YEAR UNDER CONSIDERA TION THEY ARE DISALLOWED AND ADDITION OF RS. 9,76,04,871/- IS MADE TO THE INCOME OF THE ASSESSEE ON THIS ACCOUNT. 5. UPON ASSESSEES APPEAL, LD. CIT(A) GRANTED SOME RELIEF TO THE ASSESSEE AND AFFIRMED SOME OF THE DISALLOWANCES BY HOLDING A S UNDER:- 6.4 I HAVE GONE THROUGH THE FACTS OF THE CASE, WR ITTEN SUBMISSION FILED BY THE APPELLANT, REMAND REPORT OF THE AO, REJOINDER FILED BY THE APPELLANT AND ASSESSMENT RECORD. IT IS NOTED THAT THE AO HAS WRONGLY PICKED UP THE PRIOR PERIOD INCOME INSTEAD OF PRIOR PERIOD EXPENSE S AS DEBITED IN THE P&L ACCOUNT AND IN THE PROCUREMENT ACCOUNTS OF WHEAT, PADDY AND BAJRA. THE PRIOR PERIO D EXPENSES DEBITED IN P&L ACCOUNT WHEAT ACCOUNT, PADD Y ACCOUNT, BAJRA ACCOUNT ARE RS.74,65,512/-, RS.36,39 ,693/- , RS.3,91,556/- AND RS.2,88,555/- RESPECTIVELY. THU S, THE 4 PRIOR PERIOD EXPENSES ARE OF RS. 1,17,85,316/- INST EAD OF RS.9,76,04,871/-. THE APPELLANT'S ANNUAL REPORT CONTAINING BALANCE SHEET AND P&L ACCOUNT SHOWS THAT THE BOOKS OF ACCOUNT ARE BEING FOLLOWED ON THE MERCANTI LE SYSTEM OF ACCOUNTING. THE APPELLANT'S CLAIM OF EXPE NSES U/S 11 FOR BEING A CHARITABLE INSTITUTION IS NOT AV AILABLE AS DISCUSSED IN PARA 6.1 TO 6.3. FURTHER, THE APPEL LANT HAS NOT SUBSTANTIATED ITS CLAIM WITH EVIDENCES THAT LIABILITIES TO INCUR SUCH EXPENSES HAVE AROSE DURIN G THE YEAR UNDER CONSIDERATION. THEREFORE, I AM IN AGREEM ENT WITH THE FINDING GIVEN BY THE AO THAT THE PRIOR PER IOD EXPENSES ARE NOT ALLOWABLE DURING THE YEAR. HOWEVER , THE APPELLANT GETS RELIEF OF RS.8,58,19,555/- DUE TO WR ONG FIGURES TAKEN FOR THE PRIOR PERIOD EXPENSES. THE GR OUND OF APPEAL IS PARTLY ALLOWED. 6. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPE AL BEFORE US. 7. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE HAS SUBMITTED ALL THE DETAILS PERTAINING TO THE EXPENSES CLAIMED UNDER THE HEAD PRIOR PERIOD E XPENSES. NO CASE HAS BEEN MADE OUT THAT ANY VOUCHER IS MISSING OR THAT EXPENS E IS NOT GENUINE. THE LD. COUNSEL SUBMITTED THAT ASSESSEE HAS BRANCHES SPREAD OVER A VAST AREA. THE ASSESSEE IS DEBITING THE EXPENSES SPLIT OVER TO THE SUBSEQUENT YEARS AND THE ASSESSING OFFICER HAD BEEN ALLOWING THE SAME. THE SAID ACCOUNTING PRACTICE HAS BEEN CONSISTENTLY FOLLOWED BY THE ASSESSEE AND ACCE PTED BY THE DEPARTMENT. HE SUBMITTED THAT SINCE THE ASSESSEE IS A VAST ORGANIZ ATION, THE EXPENSES WHEN NOT REPORTED OR IDENTIFIED UP TO THE CLOSE OF THE YEAR ARE SUBSEQUENTLY BOOKED AS PRIOR PERIOD EXPENSES. SINCE THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES, LD. COUNSEL SUBMITTED THAT THE CONSISTENT SYSTEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE CANNOT BE DEPARTED FROM. IN SUPPORT OF THI S PROPOSITION, LD. COUNSEL PLACED RELIANCE UPON THE FOLLOWING CASE LAWS:- 5 I) HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. JAGATJIT INDUSTRIES LIMITED ITA NO. 848/2010 VIDE ORDER DATED 6.8.2010 II) ORDER OF HON'BLE GUJARAT HIGH COURT IN THE CAS E OF SAURASHTRA CEMENT & CHEMICAL INDUSTRIES LTD V CIT (1995) 213 ITR 523. III) ITAT RANCHI BENCH DECISION IN THE CASE OF M /S HEAVY ENGINEERING CORPN LTD, RANCHI V DCIT, RANCHI IN ITA N. 28/RAN/2 015 VIDE ORDER DATED 10.3.2016 IV) ITAT, RANCHI BENCH DECISION IN THE CASE OF DCI T VS. MECON LTD, RANCHI IN ITA NO. 315/RAN/2014 VIDE ORDER DATED 4.3 .2016. 8. PER CONTRA, LD. DR SUPPORTED THE ORDERS OF THE A UTHORITIES BELOW. 9. LD. DR ALSO SUBMITTED AS UNDER:- THE ASSESSEE WAS DENIED REGISTRATION U/S J2A BY TH E CIT, PANCHKULA ON 31.08.2009 UNDER THE AMENDED PROVISION S OF SECTION 2(15) OF THE IT ACT, 1961. EARLIER THE ASSE SSEE WAS CLAIMING EXEMPTION AS CHARITABLE TRUST AND ASSESSED AS SUCH. THE ASSESSEE WAS FOR THE FIRST TIME ASSESSED AS AOP IN AY 2008-09 AND ASSESSMENT OF INCOME/ PROFIT WAS DONE A S PER THE BUSINESS PRINCIPLES FOR THE FIRST TIME. PRIOR PERI OD EXPENSES WERE ALSO DISALLOWED AND THE APPEAL IS PENDING BEFO RE THE ITAT. THE REVENUE NEVER ALLOWED PRIOR PERIOD EXPENS ES. IT IS NOTEWORTHY THAT PRIOR PERIOD EXPENSES CLAIMED PERTA INED TO PERIOD WHEN ASSESSEE WAS CLAIMING EXEMPTION AS CHAR ITABLE TRUST. THEREFORE DOCTRINE OF CONSISTENCY ENUNCIATED IN THE DELHI HIGH COURT JUDGEMENT JAGATJIT INDUSTRIES. LIMITED ITA NO. 848/2010 DATED 06.09.2010 AND IN RANCHI TRIBUNAL E ASE OF MECON LTD ITA NO. 315/RAN/2014 AND HEAVY ENGG CORP. ITA NO. 28/RAN/2015 ARE NOT APPLICABLE TO THE CURRENT C ASE. BESIDES, THE ASSESSEE IS NOT AN INCORPORATED ENTITY AND ITS ACCOUNTS ARE NOT GOVERNED BY THE COMPANY LAW OF THE COUNTRY. IT IS AN EXTENSION OF THE STATE GOVT. THEREFORE COM PARING CASES OF COMPANIES WITH THE CASE OF ASSESSEE WOULD NOT SE RVE THE END 6 OF JUSTICE. TO SUPPORT THIS POINT, IT IS SUBMITTED THAT THE ASSESSEE NOWHERE FURNISHED ANY EVIDENCE TO BUTTRESS ITS POINT THAT THESE EXPENSES WERE EARLIER PROPERLY ACCOUNTED FOR AND FORMED PART OF THE ACCOUNT OF THE RELEVANT PERIOD. FURTHER, THE ASSESSEE DOES NOT HAVE PAN INDIA OPERATIONS AND OFF ICES. ITS OPERATIONS AND OFFICES ARE LIMITED TO HARYANA STATE IS A GEOGRAPHICALLY SMALL STATE AND COMMUNICATION AND CO NNECTIVITY ARE IN AN EXCELLENT SHAPE. THEREFORE, I AM SURE THAT THE DOCTRINE OF CONSISTEN CY FOLLOWED IN THE QUOTED CASES AND WHICH THE BENCH PROPOSED TO RELY FOR JUDGING THE CASE BEFORE HAND IS NOT APPLICABLE TO T HE FACTS AND CIRCUMSTANCES OF THE CURRENT CASE. THE LD. DR FURTHER SUBMITTED THAT EARLIER THE ASSES SEE WAS ENTITLED TO EXEMPTION AS A TRUST BUT AFTER THE DENIAL OF EXEMPTION, ASSES SEE HAS BEEN DENIED PRIOR PERIOD EXPENSES. THE LD. DR SUBMITTED THAT THE CASE LAWS CITED BY THE LD. COUNSEL FOR THE ASSESSEE WERE RELATED TO THE COMPAN IES WHICH ARE GOVERNED BY COMPANIES ACT. HOWEVER, THIS IS A HARYANA STATE GO VERNMENT UNDERTAKING AND THE ACCOUNTS OF SUCH STATE GOVERNMENT UNDERTAKING A RE MAINTAINED ON WHIMS AND FANCIES. THE LD. COUNSEL SUBMITTED THAT THESE C ASE LAWS AND THE DOCTRINE OF CONSISTENCY CANNOT BE ALLOWED IN THIS CASE. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT ASSESSING OFFICER HAS MADE DISALLOWANCE BY OBSERVING THAT FOR THE PRI OR PERIOD EXPENSES CANNOT BE ALLOWED AS ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND THAT THE ASSESSEE HAS NOT SUBMITTED ANY BASIS FOR DETERMINAT ION AS TO WHEN THEY CRYSTALLIZED. IN THIS REGARD, WE FIND THAT IT IS TH E CONTENTION OF THE ASSESSEE THAT ASSESSEE IS A PUBLIC SECTOR UNDERTAKING AND IS A VA ST ORGANIZATION. THE EXPENSES WHEN NOT REPORTED OR IDENTIFIED UP TO THE CLOSE OF THE YEAR ARE SUBSEQUENTLY BOOKED UNDER PRIOR PERIOD EXPENSES. THIS SYSTEM OF ACCOUNTING OF THE ASSESSEE HAS BEEN REGULARLY ACCEPTED BY THE DEPARTMENT IN TH E PAST. THERE IS NO CHANGE IN 7 THE FACTS AND CIRCUMSTANCES OF THE CASE. IT HAS ALS O BEEN SUBMITTED THAT NECESSARY DETAILS WERE DULY SUBMITTED BEFORE THE AS SESSING OFFICER THAT ALL OF THE EXPENSES ARE SUPPORTED BY PROPER VOUCHERS AND SUPPO RTING EVIDENCE. IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT ANY SHORT COMING HAS BEEN NOTED IN THE VOUCHERS. THIS IS ALSO NOT THE CASE THAT ANY DISTOR TION IN PROFIT HAS BEEN OBSERVED AS COMPARED TO PRECEDING YEAR IN VIEW OF THE ABOVE SAID EXPENDITURE. IN THESE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, THE REVENUE HAS NO COGENT REASON WHY THE PRIOR PERIOD EXPENSES CLAIMED BY THE ASSESSEE WHICH HAVE BEEN CONSISTENTLY SO CLAIMED AND ALLOWED BY THE DEPARTME NT IN EARLIER YEARS SHOULD BE DISALLOWED IN THE CURRENT YEAR. 11. AS REGARDS THE SUBMISSIONS OF LD. DR THAT RULE OF CONSISTENCY IS NOT APPLICABLE IN THIS CASE. WE FIND THAT ASSESSEE HAS EARLIER BEEN ASSESSED IN THE STATUS OF TRUST, THEREAFTER, THE ASSESSEE HAS BEEN DENIED EXEMPTION. NO CASE HAS BEEN MADE OUT THAT FOR ANY ASSESSMENT YEAR, PRIOR T O ASSESSMENT YEAR IN APPEAL, THERE WAS ANY ADDITION ON ACCOUNT OF PRIOR PERIOD E XPENSES. FOR ASSESSMENT YEAR 2009-10, THERE WAS ACTION U/S 263 AND NO ADDIT ION WAS MADE ON ACCOUNT OF PRIOR PERIOD EXPENSES. IN THIS REGARD, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT HE HAS SHOWN ALL THE RELEVANT VOUCHERS BEFORE THE ASSESSING OFFICER. HENCE, IN OUR OPINION, LD. DRS PLEA THAT RULE OF CONSISTE NCY IS NOT APPLICABLE IN THIS CASE IS NOT AT ALL SUSTAINABLE. FURTHERMORE, WE DO NOT APPROVE THE ABOVE SUBMISSIONS OF LD. COUNSEL OF THE ASSESSEE THAT HAR YANA STATE GOVERNMENT ACCOUNTS ARE MAINTAINED ON WHIMS AND FANCIES. IN OU R CONSIDERED OPINION IT IS ALSO A FACT THAT EVEN THE STATE GOVERNMENT UNDERTAK INGS ARE SUBJECT TO PROPER AUDIT PROCEDURES. IN THESE CIRCUMSTANCES, IN OUR C ONSIDERED OPINION THE SUBMISSIONS OF LD. DR DO NOT BRING OUT COGENT REASO NS TO DEPART FROM THE RATIO AS EMANATING FROM THE AFORESAID CASE LAWS. 12. HENCE, WE REJECT THE SUBMISSIONS OF LD. DR. 8 13. THE CASE LAWS REFERRED BY THE LD. COUNSEL OF T HE ASSESSEE ABOVE DULY SUPPORT THE ABOVE PROPOSITION. IN THIS REGARD WE MA Y GAINFULLY REFER TO THE HON'BLE DELHI HIGH COURT DECISION IN THE CASE OF CI T VS. JAGJIT INDUSTRIES LIMITED (SUPRA). IN THIS CASE AFTER EXAMINING VARIO US CASE LAWS ON THE SUBJECT, THE HON'BLE DELHI HIGH COURT CONCLUDED AS UNDER:- 16. THE PRESENT FACTUAL MATRIX HAS TO BE TESTED ON THE TOUCHSTONE AND ANVIL OF THE AFORESAID ENUNCIATION O F LAW. ON A SCRUTINY OF THE FACTS THAT HAVE BEEN BROUGHT O N RECORD, IT IS DISCERNIBLE THAT THE ASSESSEE HAS BEE N CLAIMING PRIOR PERIOD OF EXPENSES ON THE GROUND THA T THE VOUCHER OF SUCH EXPENSES FROM THE EMPLOYEES/BRANCH EMPLOYEES WERE RECEIVED AFTER 31 51 MARCH OF THE FINANCIAL YEAR. IT HAS ALSO COME AS A MATTER OF FACT THAT TH E ASSESSEE HAS BRANCH OFFICES THROUGHOUT THE COUNTRY. THE ASSE SSEE HAS BEEN DEBITING THE EXPENDITURE SPILL OVER TO THE SUBSEQUENT YEARS AND THE ASSESSING OFFICER HAD BEEN ALLOWING THE SAME. THE SAID ACCOUNTING PRACTICE HAS BEEN CONSISTENTLY FOLLOWED BY THE ASSESSEE AND ACCEPTED BY THE DEPARTMENT. IF A PARTICULAR ACCOUNTING SYSTEM HAS B EEN FOLLOWED AND ACCEPTED AND THERE IS NO ACCEPTABLE RE ASON TO DIFFER WITH THE SAME, THE DOCTRINE OF CONSISTENC Y WOULD COME INTO PLAY. THE SAID ACCOUNTING SYSTEM HAS BEEN FOLLOWED FOR A NUMBER OF YEARS AND THERE IS NO PROO F THAT THERE HAS BEEN ANY MATERIAL CHANGE IN THE ACTIVITIE S OF THE ASSESSEE AS COMPARED TO THE EARLIER YEARS. NOTHING HAS BEEN BROUGHT ON RECORD TO SHOW THAT THERE HAS BEEN DISTORTION OF PROFIT OR THE BOOKS OF ACCOUNT DID NO T REFLECT THE CORRECT PICTURE IN THE ABSENCE OF ANY REASON WHATSOEVER, THERE WAS NO WARRANT OR JUSTIFICATION T O DEPART FROM THE PREVIOUS ACCOUNTING SYSTEM WHICH WAS ACCEP TED BY THE DEPARTMENT IN RESPECT OF THE PREVIOUS YEARS. SIMILARLY, WE FIND THAT COORDINATE BENCH OF ITAT, I N THE CASE OF DCIT VS. HEAVY ENGINEERING CORPORATION LTD, RANCHI IN ITA NO . 28/RAN/2015 (SUPRA), ON THE SUBJECT OF PRIOR PERIOD EXPENSES HAS HELD AS UNDER:- 9 4.3 WE HAVE HEARD BOTH THE COUNSELS AND PERUSED TH E RECORDS. WE FIND THAT THE ASSESSING OFFICER HAS MAD E THE DISALLOWANCE BY OBSERVING THAT FOR THE ABOVE ITEMS OF PRIOR PERIOD EXPENSES ASSESSEE HAS NOT SUBMITTED AN Y BASIS OF DETERMINATION AND HOW THEY CRYSTALLIZED. I N THIS REGARD, IT IS THE CONTENTION OF THE ASSESSEE THAT T HE ASSESSES IS A PUBLIC SECTOR UNDERTAKING WHOSE ACCOU NTS ARE AUDITED BY STATUTORY AUDITOR AS WELL AS THE COMPTROLLER AND AUDITOR GENERAL OF INDIA. IT IS NOT NECESSARY THAT ALL EXPENDITURES HAVE TO BE COVERED BY ACTUARIAL VALUATION REPORT. FURTHERMORE, IT HAS BEE N ASSESSEE'S CLAIM THAT THE ASSESSEE HAS VAST ORGANIZ ATION AND EXPENDITURES WHEN NOT REPORTED OR IDENTIFIED UP LO CLOSE OF THE YEAR ARE SUBSEQUENTLY BOOKED UNDER PRI OR PERIOD EXPENDITURE. THIS SYSTEM OF ACCOUNTING OF TH E ASSESSEE HAS BEEN REGULARLY ACCEPTED BY THE DEPARTM ENT IN THE PAST. THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. IT HAS ALSO BEEN SUBMITT ED THAT NECESSARY DETAILS WERE DULY SUBMITTED BEFORE THE ASSESSING OFFICER, IT HAS ALSO BEEN SUBMITTED THAT THE RELEVANT VOUCHERS OF THE EXPENDITURES CONTAINED THE SUPPORTING EVIDENCE. IT IS NOT THE CASE OF THE ASSE SSING OFFICER THAT ANY SHORT-COMING HAS BEEN NOTED IN THE VOUCHERS MAINTAINED BY THE ASSESSEE. IN THESE FACTS AND CIRCUMSTANCES, IT IS ASSESSEE'S CLAIM THAT THE ASSE SSING OFFICER HAS ERRED IN MAKING THE DISALLOWANCE AND ID . CIT(A) IS QUITE CORRECT IN DELETING THE DISALLOWANC E. 4.4 UPON CAREFUL CONSIDERATION AND HEARING BOTH TH E PARTIES, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE'S SUBMISSIONS ARE COGENT. THE ASSESSEE IS A PUBLIC SECTOR UNDERTAKING AND IT HAS GOT A VAST ORGANIZATION. IN ITS SYSTEM OF ACCOUNT WHEN EXPENDI TURES ARE NOT REPORTED OR IDENTIFIED UPTO THE CLOSE OF TH E YEAR ARE SUBSEQUENTLY' ACCOUNTED FOR UNDER PRIOR PERIOD EXPENSES. THIS SYSTEM OF ACCOUNTING HAS BEEN REGULA RLY FOLLOWED AND THE DEPARTMENT HAS NOT DISPUTED ABOUT THIS 10 IN THE PAST. WE ALSO AGREE WITH THE CONTENTION THAT THE ASSESSING OFFICER HAS CLEARLY ERRED IN DRAWING ADVE RSE INFERENCE ON THE CRYSTALLIZATION OF THESE EXPENDITU RES. IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT ANY V OUCHER OF THE ASSESSEE COMPANY HAS BEEN FOUND TO BE JACKIN G CREDIBILITY. WITHOUT ANY CHANGE IN FACTS OR (AW A REGULARLY FOLLOWED SYSTEM OF ACCOUNTING CANNOT BE TINKERED WITH. 14. IN THE LIGHT OF THE AFORESAID DISCUSSION AND PR ECEDENT, WE SET ASIDE THE ORDER OF THE AUTHORITIES BELOW AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 15. IN THE RESULT, THESE APPEALS FILED BY THE ASSES SEE STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01.07.2016 SD/- SD/- (BHAVNESH SAINI) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 01 ST JULY, 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 11