Haryana State Electronics Development Corporation Ltd., Chandigarh V. DCIT, Panchkula

ITA 484/CHANDI/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8392 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 02-01-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 03-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: B K NOHRIA
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 484/CHD/2016 ASSESSMENT YEAR : 2012-13 HARYANA STATE ELECTRONICS VS THE DCIT, DEVELOPMENT CORPORATION LTD., PANCHKULA CIRCLE, SCO 111-113, SECTOR 17-B, SECTOR 2, PANCHKULA. CHANDIGARH. PAN: AABCH1532Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.K.NOHRIA RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 02.01.2017 DATE OF PRONOUNCEMENT : 12.01.2017 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-2 GURGAON DATED 29.03.2016 FOR ASSESSMENT YEAR 2012-13 CHALLENGING THE UPHOLDING OF ADDITION OF RS. 7,37,186/- AS PRIOR PE RIOD EXPENDITURE. 2. THE ASSESSEE HAD DEBITED TO THE PROFIT & LOSS ACCOUNT FOR PRIOR PERIOD EXPENDITURE AMOUNTING TO R S. 7,37,186/-. THE ASSESSEE IS FOLLOWING MERCANTILE S YSTEM OF ACCOUNTING, THE EXPENDITURE RELATING TO PRIOR PE RIOD IS NOT ALLOWABLE IN THE CURRENT YEAR. THE ASSESSING 2 OFFICER, THEREFORE, DISALLOWED THE SAME AND MADE ADDITION. 3. THE ASSESSEE FILED WRITTEN SUBMISSION BEFORE LD. CIT(APPEALS) AND FILED DETAILS OF THE PRIOR PERIOD EXPENSES WHICH ARE TELEPHONE, ENTERTAINMENT, REPAIR AND MAINTENANCE OF COMPUTER, OFFICE MAINTENANCE, FB T AND LEGAL EXPENSES TOTALING TO RS. 87,263/-. THE P RIOR PERIOD INCOME WAS SHOWN ON ACCOUNT OF EXCESS INTERE ST AS INCOME ON FDR AMOUNTING TO RS. 6,49,923/-. THUS , TOTAL ADDITION WAS OF RS. 7,37,186/-. THE ASSESSEE SUBMITTED THAT OUT OF PRIOR PERIOD EXPENSES OF RS. 87,263/-, FBT EXPENSES OF RS. 48,182/- ARE NOT ALLOWABLE EXPENSES AND THIS IS NOT EXPENDITURE. BA LANCE AMOUNT OF RS. 39,081/- ARE THE EXPENSES RECEIVED, H AVE ARISEN, SANCTION, COULD NOT BE ESTIMATED ACCURATELY IN THE PREVIOUS YEAR AND HAVE BEEN PAID DURING THE YEA R UNDER CONSIDERATION, HENCE, ALLOWABLE EXPENDITURE. AS REGARDS PRIOR PERIOD INCOME OF RS. 6,49,923/- IS ACTUALLY THE PRIOR PERIOD EXPENSES BEING EXCESS INT EREST ON FDR BECAUSE ASSESSEE HAS SHOWN INTEREST INCOME O N ACCRUAL BASIS IN THE PREVIOUS YEARS BUT IN CERTAIN CASES, FDR WERE PRE-MATURED FOR WANT OF FUNDS OR THERE WAS EXCESS BOOKING OF INCOME DUE TO CALCULATION ERROR O R OMISSION. DUE TO ERROR OR OMISSION, EXCESS CREDIT O F INTEREST INCOME AND PAYMENT OF INCOME TAX ON THAT AMOUNT WAS MADE IN PREVIOUS YEAR. 3 4. THE LD. CIT(APPEALS) NOTED THAT ADMITTEDLY FBT EXPENSES ARE NOT ALLOWABLE EXPENSES. IT WAS, THERE FORE, CONFIRMED, BUT REGARDING THE BALANCE EXPENDITURE TOTALING TO RS. 39,081/-, THE ASSESSEE CLAIMED THE SAME AS ARISEN AND SANCTIONED IN THE CURRENT YEAR, HOWEV ER, NO EVIDENCE IN THIS REGARD WAS FURNISHED. THE ASSE SSEE ALSO FAILED TO SHOW HOW THESE EXPENSES COULD NOT BE ESTIMATED CORRECTLY IN THE PREVIOUS YEAR. THE LD. CIT(APPEALS), THEREFORE, CONFIRMED THE ADDITION. A S REGARDS THE AMOUNT OF RS. 6,49,923/-, IT WAS FOUND FROM THE SUBMISSION OF THE ASSESSEE THAT THERE WAS NO SU CH EXPENDITURE INCURRED IN THE CURRENT YEAR. THE CLAI M OF THE ASSESSEE IS BASED ON THE FACT THAT IN EARLIER Y EARS, THE INCOME FROM FDR SHOWN WAS EXCESSIVE AND THEREFORE, EXCESS INCOME SHOWN IN THE EARLIER YEAR WAS CLAIMED AS EXPENDITURE IN THE CURRENT YEAR. THE LD. CIT(APPEALS), THEREFORE, NOTED THAT IN CASE ANY INC OME HAS BEEN SHOWN IN EXCESS IN EARLIER YEAR, THE ONLY REMEDY FOR THE SAME IS BY REVISING THE RETURN FOR T HAT YEAR. UNDER NO PROVISION OF INCOME TAX ACT, CAN SU CH EXCESS INCOME BE CLAMED AS EXPENDITURE IN THE SUBSEQUENT YEAR. THE ADDITION WAS CONFIRMED AND APP EAL OF THE ASSESSEE WAS DISMISSED. 5. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE FINDINGS OF AUTHORITIES BEL OW. THE LD. COUNSEL FOR THE ASSESSEE DID NOT ARGUE WITH REGARD TO PRIOR PERIOD EXPENSES TOTALING TO RS. 87, 263/-. 4 IN THE ABSENCE OF ANY ARGUMENT AND ANY CHALLENGE TO THE FINDINGS OF AUTHORITIES BELOW, NO INTERFERENCE IS C ALLED FOR ON THIS MATTER. THE ADDITION OF RS. 87,263/- IS , THEREFORE, CONFIRMED. AS REGARDS REMAINING ADDITIO N OF RS. 6,49,923/- IS CONCERNED, THE LD. CIT(APPEALS) F OUND FROM THE SUBMISSIONS OF THE ASSESSEE THAT THE CLAIM OF THE ASSESSEE IS BASED ON THE FACT THAT IN EARLIER Y EARS, THE INCOME FROM FDR WAS SHOWN EXCESSIVE, THEREFORE, EXCESS INCOME DECLARED IN THE EARLIER YEAR WAS CLAI MED AS EXPENDITURE IN ASSESSMENT YEAR UNDER APPEAL. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT WHEN ASSESS EE SHOWN EXCESS INCOME IN PRECEDING YEAR, THE EXCESS INCOME WAS CLAIMED AS EXPENDITURE IN ASSESSMENT YEA R UNDER APPEAL UNDER SECTION 37 OF THE INCOME TAX ACT . HE HAS, HOWEVER, ADMITTED THAT ASSESSEE HAS NOT INCURRED ANY EXPENDITURE IN THIS YEAR ON THIS AMOUN T AND HE WAS NOT ABLE TO SATISFY AS TO HOW THE EXCESS INCOME SHOWN IN EARLIER YEAR CAN BE CLAIMED AS EXPENDITURE IN THE CURRENT YEAR. HE HAS ALSO NOT BE EN ABLE TO SATISFY AS TO UNDER WHICH PROVISION OF LAW THE ASSESSEE SHALL BE ENTITLED FOR DEDUCTION ON ACCOUNT OF EXCESS INCOME SHOWN IN PRECEDING ASSESSMENT YEAR. THE LD. CIT(APPEALS) WAS, THEREFORE, JUSTIFIED IN HOLDI NG THAT IN CASE ANY INCOME HAS BEEN SHOWN IN EXCESS IN ANY EARLIER YEAR, THE ONLY REEDY FOR THE SAME IS BY REV ISING THE RETURN FOR THE SAID YEAR. THERE IS NO PROVISIO N UNDER INCOME TAX ACT TO SUPPORT THE EXPLANATION OF THE ASSESSEE THAT SUCH EXCESS INCOME CAN BE CLAIMED AS 5 EXPENDITURE IN SUBSEQUENT YEAR. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT SINCE ASSESSEE HAS NO REMED Y NOW, THEREFORE, ASSESSEE MADE A CLAIM OF REDUCTION OF THE INCOME BY CLAIMING IT AS EXPENDITURE. THE SUBMISSION OF LD. COUNSEL FOR THE ASSESSEE IS WITHO UT SUBSTANCE AND HAS NO MERIT AT ALL. THERE IS NO JUSTIFICATION IN MAKING SUCH A CLAIM WITHOUT REFERR ING TO ANY PROVISION OF LAW. THIS GROUND OF APPEAL OF THE ASSESSEE HAS NO MERIT, THE SAME IS DISMISSED. THE APPEAL OF THE ASSESSEE IS FRIVOLOUS AND HAS BEEN FI LED WITHOUT ANY REASON. THEREFORE, IT IS A FIT CASE OF LEVY OF THE COST, HOWEVER, CONSIDERING THE SMALL AMOUNT INVOLVED IN THE APPEAL OF THE ASSESSEE, WE DO NOT I MPOSE COST IN THIS CASE. IN THIS VIEW OF THE MATTER, WE DISMISS THE APPEAL OF THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( ANNAPURNA GUPTA) (BHAVNESH SAINI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 12 TH JANUARY, 2017. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD