IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’: NEW DELHI BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.2379/Del/2023 (ASSESSMENT YEAR 2013-14)

ITA No.2330/Del/2023 (ASSESSMENT YEAR 2018-19)

Dy. CIT, Crystal Crop Protection Circle-4(2), Delhi. Limited, Vs. B-95, Wazirpur, Industrial Area Delhi, Delhi-110052.

PAN-AABCJ3574E (Appellant) (Respondent)

C.O. No.159/Del/2023 Arising out of ITA No.2330/Del/2023 (ASSESSMENT YEAR 2018-19)

Crystal Crop Protection Dy. CIT, Limited, Circle-4(2), Delhi.

B-95, Wazirpur, Vs.

Industrial Area Delhi, Delhi-110052.

PAN-AABCJ3574E (Appellant) (Respondent)

Assessee by Shri S.S. Nagar, CA Department by Shri Rajesh Kumar Dhanesta, Sr. DR Date of Hearing 30.10.2025 Date of Pronouncement 09.01.2026

O R D E R

PER MANISH AGARWAL, AM:

The captioned two appeals are filed by the revenue and Cross objection is filed by the assessee for following assessment years.

by the assessee for following assessment years.

by the assessee for following assessment years.

by the assessee for following assessment years.

by the assessee for following assessment years.

by the assessee for following assessment years.

by the assessee for following assessment years.

by the assessee for following assessment years.

by the assessee for following assessment years.

2. Since both the appeals and cross objection are related to the same assessee, therefore, they have been heard together and accordingly, adjudicated by a common order.

3. First, we take revenue’s appeal in ITA NO. 2379/Del/2023 for AY 2013-14.

ITA No. 2379/Del/2023 (Revenue’s Appeal) AY 2013-14

4. Brief facts of the case are that assessee has filed its return of income on 30.11.2013 declaring total income at Rs.69,44,03,870/-. The assessment was completed u/s 143(3) r.w.s. 144C of the Act on 28.12.2016 at a total income of Rs.70,68,75,056/- and thereafter, case of the assessee was reopened vide issue of notice u/s 148 of the Act on 26.03.2019 for the reason that assessee has claimed prior period expenditure of Rs. 2,37,83,559/- which remained unverified and being pertinent to earlier year should be disallowed. After considering the submissions of the assessee, AO made disallowance of the said expenditure and, accordingly total income of the assessee was assessed at Rs.72,66,34,480/-.

5. Against the said order, assessee filed an appeal before Ld. CIT(A) who vide order dated 29.05.2023 has partly allowed the appeal and disallowances made by AO was deleted.

6. Aggrieved by the said order, the Revenue is in appeal before the Tribunal on the strength of following grounds of appeal:-

1. Whether the Ld. CIT(A) has erred on not appreciating the fact that the expense claimed by the assessee is in the nature of deduction eligible u/s 37(1) of the Income Tax Act, but to be claimed in the previous year in which it was incurred.

2. Whether the Ld. CIT(A) has erred on not appreciating the fact that the assessee is following mercantile system of accounting where the expense has to be claimed on accrual basis.

3. Whether the Ld. CIT(A) has erred in allowing the appeal without examining the actual discount given where no lifting of discount has been quantified by the assessee.

4. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal.”

7. Heard both the parties and perused the materials available on record. The sole issue in dispute is with respect to the allowability of Prior Period Expenses of Rs.2,37,83,59/- claimed by the assessee in its P&L Account towards discount given to customers. Claim of the assessee was that it had started discount policy which was introduced in Financial Year 2011-12. Since the amount of discount was crystalized during the year under appeal, therefore, the discount paid/credited to the customers was claimed as expenditure in the P&L Account and was reported under the head “Prior Period Expenses” forming part of other ex