The DCIT, Circle-3(1), Visakhapatnam V. M/s Hindustan Shipyard Ltd., Vinkonda

ITA 21/VIZ/2006

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7199 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 5 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 31-01-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 19-01-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TH L PETER

Judgement Text

ITA 21/V/06 HINDUSTAN SHIPYARD LTD.,VSKP IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO. 21 /VIZAG/ 20 06 ASSESSMENT YEAR : 2002 - 03 DCIT CIRCLE - 3(1) VI SAKHAPATNAM M/S. HINDUSTAN SHIPYARD LTD VISAKHAPATNAM (APPELLANT) VS. (RESPONDENT) PAN NO.AAACH 4275P APPELLANT BY: SHRI TH. L. PETER, CIT(DR) RESPONDENT BY: SHRI G.V.N. HARI, CA ORDER PER SHRI S.K. YADAV, JUDICIAL MEMBER : - THIS APPEAL IS PREF ERRED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) ON FOLLOWING GROUNDS: 1. THE ORDER OF THE CIT(A) - I, VISAKHAPATNAM IS ERRONEOUS IN LAW AND TO THE FACTS OF THE CASE; 2. THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING THE ASSESSEES CLAIM FOR DEDUCTION TOWARDS PRIOR PERIOD EXPENSES. 3. THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT PRIOR PERIOD EXPENSES CAN BE CLAIMED AS DEDUCTION IN A SUCCEEDING YEAR ONLY ON THE BASIS OF ACCRUAL/CRYSTALISATION DURING SUCH SUCCEEDING YEAR AND NOT OTHERWISE. 4. FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF HEARING, THE DECISION OF THE CIT(A) WITH REFERENCE TO THE CITED ISSUE, IS QUITE UNACCEPTABLE. 2. THOUGH THE REVENUE HAS RAISED VARIOUS GROUNDS OF APPEAL BUT THEY ALL RELATE TO THE ALLOWANCE OF PRIOR PERIOD EXPENSES. THE LD. D.R. HAS EMPHATICALLY ARGUED THAT NEITHER THE PRIOR PERIOD EXPENSES HAVE BEEN CRYSTALISED IN THE IMPUGNED ASSESSMENT YEAR NOR IT WAS ACCRUED . THEREFORE, IT CANNOT BE ALLOWED. 3. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND HAS SUBMITTED THAT THE ASSESSEE HAS OFFERED THE PRIOR PERIOD INCOME DURING THE IMPUGNED ASSESSMENT YEAR, THEREFORE, HE IS ALSO ELIGIBLE TO CLAIM THE PRIOR PERIOD ITA 21/V/06 HINDUSTAN SHIPYARD LTD.,VSKP 2 EXPENSES. HE HAS INVITED OUR ATTENTION AT PG.NO.3 OF THE ASSESSME NT ORDER IN WHICH THE ASSESSING OFFICER HIMSELF HAS NOTED THE PRIOR PERIOD INCOME AND THE EXPENDITURE. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT IF PRIOR PERIOD INCOME IS TO BE ACCEPTED IN THE IMPUGNED ASSESSMENT YEAR, THE PRIOR PERIOD EXPEN DITURE ARE REQUIRED TO BE ALLOWED. ASSESSING OFFICER HAS TO TAKE THE STATUS AS A WHOLE AND NOT TO MAKE A PICK AND CHOOSE OF A PARTICULAR ITEM. 4. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW, WE FIN D THAT ASSESSEE HAS OFFERED THE PRIOR PERIOD INCOME ALONG WITH THE EXPENDITURE DURING THE IMPUGNED ASSESSMENT YEAR. THE ASSESSING OFFICER HAS ACCEPTED THE PRIOR PERIOD INCOME IN THIS YEAR BUT DISALLOWED THE PRIOR PERIOD EXPENDITURE. THIS ACTION OF THE AS SESSING OFFICER IS NOT PROPER AS HE HAS TO TAKE INTO THE ACCOUNT THE STATUS AS A WHOLE AND NOT TO MAKE A PICK AND CHOOSE. WE HOWEVER, CAREFULLY EXAMINED THE ORDER OF CIT(A) AND WE FIND THAT CIT(A) HAS ADJUDICATED THE ISSUE IN THE LIGHT OF JUDGEMENT OF THE DELHI HIGH COURT IN THE CASE OF ADDITIONAL CIT VS. J AY ENGINEERING WORKS LIMITED 113 ITR 389. OUR ATTENTION WAS ALSO INVITED TO THE OTHER JUDGEMENT OF THE DELHI HIGH COURT IN THE CASE OF CIT VS. MOBILE PVT. LTD. 328 ITR 17 ON THE IMPUGNED PROPOSITION OF LAW. SINCE THE CIT(A) HAS PROPERLY ADJUDICATED THE ISSUE AND WE FIND NO INFIRMITY THEREIN, WE CONFIRM HIS ORDER. 5 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 10.2. 20 1 1 SD/ - SD/ - (BR BASKARAN) (SU NIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 10 TH FEBRUARY , 20 1 1 ITA 21/V/06 HINDUSTAN SHIPYARD LTD.,VSKP 3 COPY TO 1 DCIT, CIRCLE - 3(1), VISAKHAPATNAM 2 M/S. HINDUSTAN SHIPYARD LTD., GANDHIGRAM, VISAKHAPATNAM 3 THE CI T, VISAKHAPATNAM 4 THE CIT (A) - I, VISAKHAPATNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM