M/s. Jhaveri Securities Ltd., Baroda V. The Dy.CIT, Circle-1(2), Baroda

ITA 1715/AHD/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8296 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 04-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH SINGH HEARING CONCLUDE

Judgement Text

ITA NO.1715/AHD/2014 ASSESSMENT YEAR: 2009-10 PAGE 1 OF 2 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND MS. MADHUMITA ROY JM] ITA NO.1715/AHD/2014 ASSESSMENT YEAR: 2009-10 JHAVERI SECURITIES LTD., ..................APPELLANT 301-302, PAYAL TOWERS-II, SAYAJIGUNJ, BARODA. [PAN : AAACJ 4727 A] VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(2), BARODA. ............................RESPONDENT APPEARANCES BY MUKUND BAKSHI FOR THE APPELLANT SAURABH SINGH FOR THE RESPONDENT HEARING CONCLUDED ON: 11.05.2018 ORDER PRONOUNCED ON : 15.05.2018 O R D E R PER PRAMOD KUMAR, AM: 1. THIS APPEAL IS DIRECTED AGAINST LEARNED CIT(A)S ORDER DATED 28 TH FEBRUARY, 2014 FOR THE ASSESSMENT YEAR 2009-10. 2. GRIEVANCE OF THE ASSESSEE IS THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING TH E DISALLOWANCE OF RS.20,05,318/- HOLDING THE SAME TO BE PRIOR PERIOD EXPENSES. 3. BRIEFLY STATED, THE RELEVANT MARTIAL FACTS ARE L IKE THIS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF RS.12,41,53,955/-, ON ACCOUNT OF BUSIN ESS PROCUREMENT EXPENSES, OUT OF WHICH RS.14,05,351/- PERTAINED TO THE PRIOR PERIOD. THE ASSESSEES EXPLANATION THAT THESE EXPENSES PERTAIN TO SUB-BROKERAGE WHICH IS SE TTLED ON RECEIPT WAS REJECTED ON THE GROUND THAT THERE IS NOTHING TO JUSTIFY NON ACCOUN TING OF CLAIM. SIMILARLY, THE ITA NO.1715/AHD/2014 ASSESSMENT YEAR: 2009-10 PAGE 2 OF 2 COMMISSION EXPENSES, PERTAINING TO PRIOR PERIOD, AM OUNTING TO RS.6,02,967/- WERE ALSO DISALLOWED. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATIS FIED AND IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE AP PLICABLE LEGAL POSITION. 5. WE FIND THAT THE ISSUE IN APPEAL IS NOW COVERED BY JUDGEMENT OF HONBLE BOMBAY HIGH COURT, IN THE CASE OF CIT VS. MAHANAGAR GAS LIMITED [(2014) 42 TAXMANN 40 (BOM)], AND BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PCIT VS. ADANI ENTERPRISE LIMITED (ITA NO.566 OF 2016; JUDGMENT DA TED 20.07.2016) WHEREIN IT IS HELD THAT EVEN WHEN ASSESSEE IS FOLLOWING MERCANTILE MET HOD OF ACCOUNTING, THE PRIOR PERIOD EXPENSES CAN INDEED BE ALLOWED AS DEDUCTION WHEN LI ABILITY CRYSTALLISES IN THE RELEVANT PREVIOUS YEAR. IN ANY EVENT, THE ISSUE IS REVENUE NEUTRAL SINCE THE RATE OF TAX IS THE SAME, AND IT IS NOBODYS CASE THAT THE SAME EXPENSE S HAVE BEEN CLAIMED DEDUCTION IN MORE THAN ONE YEAR. WE HAVE ALSO NOTED THAT THE RE VENUE AUTHORITIES HAVE NOT EVEN DISPUTED THAT LIABILITY TO PAY THE PRIOR PERIOD EXP ENSES CRYSTALLISED DURING THE RELEVANT PREVIOUS YEAR. IN VIEW OF THE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE DELETE THE IMPUGNED DISALLOWANCE OF RS.20,05,318 /-. THE ASSESSEE SUCCEEDS ACCORDINGLY. 6. IN THE RESULT, THE APPEAL IS ALLOWED. PRONOUNCE D IN THE OPEN COURT ON THIS 15 TH DAY OF MAY, 2018. SD/- SD/- MS. MADHUMITA ROY PRAMOD KUMAR JUDICIAL MEMBER) (ACCOUNTANT MEMB ER) DATED: 15 TH MAY, 2018. PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDE NT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD