DCIT, Central Circle-12, Room No.-330, ARA Centre, Jhandewalan Extn., New Delhi Vs. Escorts Construction Equipment Ltd., Plot No.-219, Sector-58, Ballabgarh-121004.
May, 18th 2015
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: `B' NEW DELHI
BEFORE SMT DIVA SINGH, JUDICIAL MEMBER
SH. T.S.KAPOOR, ACCOUNTANT MEMBER
(ASSESSMENT YEAR- 2010-11)
DCIT, vs Escorts Construction Equipment Ltd.,
Central Circle-12, Room No.-330, Plot No.-219, Sector-58,
ARA Centre, Jhandewalan Extn., Ballabgarh-121004.
New Delhi PAN-AAACE2339R
Appellant by Sh.K.K.Jaiswal, Sr. DR
Respondent by Sh.Pardeep Kumar, CA
Date of Hearing 05.05.2015
Date of Pronouncement 15
PER DIVA SINGH, JM
By the present appeal, the Revenue assails the correctness of the order
dated 31.07.2013 of CIT(A)-XIII, Delhi pertaining to 2010-11 assessment year on
the following grounds:-
1. "On the facts and circumstances of the case and in law, the CIT(A)
has erred in deleting the addition of Rs.28,31,000/- on account of
the prior period expenses.
2. On the facts and circumstances of the case and in law, the CIT(A)
has erred in merely relying on the statement of the assessee that
the prior period expenses had crystallized during the year, without
submission of any evidence for crystallization of these expenses
during the year."
2. The subject matter of dispute in the present appeal is the addition made by
way of rejecting the claim of prior period expenses put forth by the assessee. The
AO required the assessee to justify the claim put forth stated to be on account of
material; manufacturing; operating sales; and administration. Rejecting the
explanation in view of the fact that the assessee following mercantile system of
accounting was required to account for current year's income /expenses only as
per law, addition of the said amount was made.
3. In appeal before the First Appellate Authority, considering the explanation
where the expenses were stated to be on account of rent, erection and
commissioning charges, repair and maintenance consultancy/professional
charges, rebook charges etc. the claim was allowed relying on Saurashtra Cement
and Chemical Industrial Ltd. vs. CIT 213 ITR 523 (Guj.) etc. Aggrieved by which
the Revenue is in appeal before the Tribunal.
4. Both the parties have been heard whereas the ld. Sr. DR submits that no
evidence in support of the claim has been referred to in the impugned order and
there is no discussion thereon while granting relief. The Ld. AR on the other
hand apart from relying upon the impugned order, submitted that in the
alternate the issue may be restored to the AO who has not cared to discuss the
facts on record. The alternate submission of the Ld. AR was agreed to by the
5. We have heard the rival submissions and perused the material available on
record. On a consideration of the peculiar facts and circumstances of the case,
we are of the view that for want of necessary discussion on facts both the
impugned order and the assessment order deserve to be set aside. The issue in
the circumstances is required to be considered afresh considering the facts on
record. Accordingly, agreeing with the alternate submission of the Ld. AR the
issue is restored back to the file of the AO with the direction to pass a speaking
order in accordance with law after giving the assessee a reasonable opportunity of
6. In the result the appeal of the Revenue is allowed for statistical purposes.
The order is pronounced in the open court on 15th of May 2015.
(T.S.KAPOOR) (DIVA SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Copy forwarded to:
5. DR: ITAT
ITAT NEW DELHI
1. Draft dictated on 05.05.2015 PS
2. Draft placed before author 05.05.2015 PS
3. Draft proposed & placed before the JM/AM
4. Draft discussed/approved by JM/AM
5. Approved Draft comes to the .05.2015 PS/PS
6. Kept for pronouncement on PS
7. File sent to the Bench Clerk .05.2015 PS
8. Date on which file goes to the AR
9. Date on which file goes to the
10. Date of dispatch of Order.