Case Law Details
BRIEF FACTS OF THE CASE AND QUESTION OF LAW
Brief Facts and Question of Law:
This is assessee’s appeal directed against the order passed by learned CIT (A)-I, Lucknow dated 06/02/2013 for the assessment year 2008-09. learned CIT(A)-I, Lucknow has not given weightage to this fact and legal status that provision of audit fee does not come under the ambit of 43B of the I.T. Act 1961.
CONTENTION OF THE REVENUE
Disallowance of Audit Fees related to A.Y. 2004-05, 2005-2006 and 2006-2007
a. The Revenue supported the order of learned CIT(A) and contended that the decision of CIT(A) is on the basis that the expenditure are pertaining to earlier years and the assessee had not been able to furnish any evidence to show that the above expenses have crystallized in the present year.
b. Assessee follows mercantile system of accounting and therefore, any expense of earlier year can be allowed in the present year only if the assessee is able to establish that the expenses have crystallized in the present year. In the present assessee had not been able to furnish any evidence to show that the above expenses have crystallized in the present year. In view of the same Audit fees for earlier Assessment Year should not be allowed.
CONTENTION OF THE ASSESSEE
The assessee was of the contention that the provision of Rs. 46 Lacs was made for audit fees for assessment year 2004-05, 2005-2006 and2006-2007. The assessee submitted that if the provision is made, the claim of the assessee should be allowed and submitted a letter from Chief Audit Officer, Co-operative Society and Panchayat, U.P. dated 17/06/2009 for payment of audit fees.
HELD BY ITAT, LUCKNOW
There is clear finding of CIT(A) that since the assessee is following mercantile system of accounting, the expenses of earlier year cannot be allowed in the present year because the assessee had not been able to furnish any evidence to show that the above expenses have crystallized in the present year. Before us also, no such evidence has been brought on record by the assessee that the expenses have crystallized during the present year. We, therefore, do not find any reason to interfere in the order of CIT(A). Accordingly, this ground is rejected.
