Appeal details
Counselvise Citation
[2019] 116 COUNSELVISE.COM (IT) 7655 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
22-07-2019
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
A
Assessment Year
2015-2016
Appeal Filed On
22-04-2019
Judgement Text
, / , IN THE INCOME TAX APPELLATE TRIBUNAL A SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ ITA NO.1155/CHNY/2019 ' #$' / ASSESSMENT YEAR : 2015-16 M/S QUANTUM LEAP CONSULTING PVT. LTD., NO. 3 & 4, 6 TH FLOOR, KASI ARCADE, NO.116, THYAGARAYA ROAD, T. NAGAR, CHENNAI - 600 017. PAN : AAACQ 0967 B V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 5(2), CHENNAI - 600 034. (&'/ APPELLANT) (()&'/ RESPONDENT) &' * + / APPELLANT BY : SHRI UTTAMCHAND JAIN, CA ()&' * + / RESPONDENT BY : SHRI SANATH KUMAR RAHA, JCIT , # * -. / DATE OF HEARING :03.07.2019 /0$ * -. / DATE OF PRONOUNCEMENT : 22.07.2019 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -3, CHENNAI, D ATED 01.02.2019 AND PERTAINS TO ASSESSMENT YEAR 2015-16. 2 I.T.A. NO.1155/CHNY/19 2. I HEARD SHRI UTTAMCHAND JAIN, THE LD. REPRESENTA TIVE FOR THE ASSESSEE AND SHRI SANATH KUMAR RAHA, THE LD. DEPART MENTAL REPRESENTATIVE. 3. THE FIRST ISSUE ARISES FOR CONSIDERATION IS DISA LLOWANCE OF PRIOR PERIOD EXPENSES. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS DEBITED INTEREST PAYMENT TO THE EXTENT OF 2,18,015/-. SINCE THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNT ING, LIABILITY TO PAY INTEREST HAS TO BE ASSESSED IN THE YEAR IN WHICH TH E LIABILITY ACCRUED. THE CIT(APPEALS) FOUND THAT THE INTEREST LIABILITY ACCR UED IN THE ASSESSMENT YEAR 2014-15. THEREFORE, IT CAN BE CONSIDERED ONLY FOR THE ASSESSMENT YEAR 2014-15 AND NOT DURING THE YEAR UNDER CONSIDER ATION. IT IS NOT IN DISPUTE THAT THE LIABILITY TO PAY INTEREST ACCRUED IN THE ASSESSMENT YEAR 2014-15 AND NOT IN THE ASSESSMENT YEAR 2015-16. ME RELY BECAUSE THE ASSESSEE PAID THE INTEREST DURING THE YEAR UNDER CO NSIDERATION, THE SAME CANNOT BE CLAIMED AS EXPENDITURE IN VIEW OF THE MER CANTILE SYSTEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE. IT IS A WELL SETTLED PRINCIPLE OF LAW THAT WHEN THE ASSESSEE WAS FOLLOWING MERCANTILE SYS TEM OF ACCOUNTING, THE CLAIM HAS TO BE MADE IN THE YEAR IN WHICH THE L IABILITY ACCRUED IRRESPECTIVE OF THE ACTUAL PAYMENT. THEREFORE, THI S TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 3 I.T.A. NO.1155/CHNY/19 4. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADVA NCES WRITTEN OFF TO THE EXTENT OF 1,30,552/-. 5. THE ASSESSEE HAS WRITTEN OFF 1,30,552/- IN THE PROFIT & LOSS ACCOUNT. THE ASSESSING OFFICER FOUND THAT THE ADVA NCES WRITTEN OFF ARE IN THE NATURE OF DEPOSITS. THE DEPOSITS ARE NOT REVEN UE EXPENDITURE. THE ASSESSING OFFICER FOUND THAT IT CANNOT BE ALLOWED A S WRITTEN OFF. REFERRING TO SOME OF THE SALARY ADVANCES AND TRAVEL ADVANCES, THE ASSESSING OFFICER FOUND THAT ALLOWING THE SAME DURING THE YEA R UNDER CONSIDERATION WOULD AMOUNT TO DOUBLE RELIEF. ON APPEAL BY THE AS SESSEE, THE CIT(APPEALS) FOUND THAT THE DETAILS OF ADVANCES WER E NOT AVAILABLE BEFORE HIM. THEREFORE, HE CONFIRMED THE ORDER OF T HE ASSESSING OFFICER. EVEN BEFORE THIS TRIBUNAL, THE DETAILS IN RESPECT O F ADVANCES WERE NOT AVAILABLE. THE ASSESSING OFFICER FOUND THAT PART O F ADVANCES WERE DEPOSITS. EVEN DETAILS OF DEPOSITS WERE NOT AVAILA BLE ON RECORD. IN THOSE CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED O PINION THAT THE MATTER NEEDS TO BE RE-EXAMINED. ACCORDINGLY, ORDERS OF BO TH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ISSUE OF ADVANCES WRITT EN OFF IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSIN G OFFICER SHALL RE- EXAMINE THE MATTER AND BRING ON RECORD THE NATURE O F ADVANCES AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WI TH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 4 I.T.A. NO.1155/CHNY/19 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 22 ND JULY, 2019 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED, THE 22 ND JULY, 2019 KRI. * (-34 54$- /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. , 6- () /CIT(A)-3, CHENNAI. 4. PRINCIPAL CIT-5, CHENNAI 5. 4#7 (- /DR 6. 8' 9 /GF.
