Prior period expenses disallowance deleted as tax rate was same from year to year

Disallowance for prior period expenses deleted by the ITAT as the tax rate was the same from one year to another year

ABCAUS Case Law Citation:
ABCAUS 3004 (2019) (06) ITAT

In this appeal, the revenue WAS aggrieved with the order of the CIT(A) in deleting the addition made by the Assessing Officer (AO) on account of prior period expenses.

The Tribunal noted that the Coordinate Bench in assessee’s own case had deleted the disallowance of deduction on account of prior period expenses.

The Coordinate Bench, considering the volume of transaction of the company and the fact that the taxation rate being the same from one year to another year , had opined that it does not make any difference whether the expenses are allowed in the year or in the earlier years.

The Tribunal had noted that it was not the case of the assessee that expenses were knowingly not charged to the accounts. According to the assessee, there was a time limit for finalzation of the accounts at the Head Office which could not wait for any further for receipt of the information from the branches.

The Revenue when asked could not point out as to as to whether the said order of the Tribunal was even challenged before the Hon’ble High Court or whether the Hon’ble High Court had taken any contrary view.

Under these circumstances, being the same, the Tribunal following the order in assessee’s own case, upheld the order of the CIT(A), who had deleted the addition.

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