No perversity in order of CIT(A) & ITAT if they allowed exp. after considering remand report submitted by AO: HC

Case details: CIT v. Karnataka Power Corporation Ltd - [2021] 129 taxmann.com 179 (Karnataka)

Judiciary and Counsel Details

• • Alok Aradhe and Hemant Chandangoudar, JJ.  
  • K.V. Aravind, Adv. for the Appellant 
  • A. Shankar, Sr. Counsel and V. Chandrashekar, Adv. for the Respondent.

Facts of the Case

Assessee-company was engaged in business of power generation. It claimed prior period expenditure towards coal transport due to price escalation and surface transport charges paid to coal suppliers. However, Assessing Officer (AO) disallowed same. On appeal, the Commissioner (Appeals), as well as the Tribunal, ruled in favor of assessee.

On appeal before the High Court, AO contended that Tribunal grossly erred in allowing such prior period expenses without appreciating fact that assessee did not make any submissions on said claim either before Assessing Officer or before the Commissioner (Appeals).

High Court held

The High Court held assessee had filed written submissions before the Commissioner (Appeals) in which claim with regard to prior period expenses was made. The Commissioner (Appeals) had also asked AO to submit a remand report and audit books of account of assessee. Same was duly submitted by AO and books of account of assessee were also audited.

On basis of material available on record, the Commissioner (Appeals), as well as Tribunal, had allowed claim of assessee with regard to prior period expenses. Therefore, the finding of fact recorded by Commissioner (Appeals) and Tribunal could not be said to be perverse.

Case Review

• • Karnataka Power Corporation Ltd. v. CIT [IT Appeal No. 323 (Bang.) of 2012, dated 9-5-2014] (para 8) affirmed.

List of Cases Referred to

• • CIT v. ING Vysya Bank Ltd. [2020] 114 taxmann.com 506/270 Taxman 162/422 ITR 116 (Kar.) (para 4)
  • Rotork Controls India (P.) Ltd. v. CIT [2009] 180 Taxman 422/314 ITR 62 (SC) (para 5)
  • CIT v. Excel Industries Ltd. [2013] 38 taxmann.com 100/219 Taxman 379/358 ITR 295 (SC) (para 6)
  •  CIT v. Bilahari Investment (P.) Ltd. [2008] 168 Taxman 95/299 ITR 1 (SC) (para 6).