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14. The assessee is noted to have explained before the lower authorities that, such journal entries are passed at the end of the year for the purpose of transferring the amounts incurred during the year, which may have been erroneously debited to wrong ledger accounts, to the correct/appropriate ledger account, which is relevant to the concerned expenditure or for the purpose of consolidating the entries under primary ledger accounts. After examining the above entries, we agree with the Ld. CIT(A) that this explanation was tenable in as much as these journal entries passed to simply transfer the amounts debited under a wrong ledger to the correct ledger, and thus cannot be construed to be booking of bogus expense. The relevant findings of Ld. CIT(A) recorded in the common appellate order for AYs 2016-17 to 2019-20, is noted to be as under:-
9.6 It is a normal part of the accounting process that such journal entries are passed at the end of the year for the purpose of transferring ITA Nos.131 to 136/Chny/2024 (AYs 2016-17 to 2021-22) ITA Nos.235 to 240/Chny/2024 (AYs 2016-17 to 2021-22) Shri Irulandi Thevar Vetrivel :: 19 ::
the amounts, which may have been erroneously debited to wrong ledger accounts, to the correct/appropriate ledger account which is relevant to the concerned expenditure or for the purpose of consolidating the entries under primary ledger accounts. In the case of the Appellant, the "Coolies and wages" expenditure which was erroneously debited to "Fuel Exp - Diesel", "Construction materials - other bulk items" in A.Y 2016- 17 and to "Oddanchathiram Site Expenses" in A.Y 2019-20 was transferred to the "Coolies and wages" account by means of such journal entries. Further, expenses like "Coolies and wages", "Power / electricity" and "Site operating expenses" pertaining to the contract business of the Appellant, which were incurred on behalf of the Appellant by various other proprietary concerns of the Appellant and debited in their accounts, were transferred to the accounts of the contract business of the Appellant at the end of the year by debiting the concerned ledger account in the contract accounts of the Appellant and by crediting the account of such other proprietary businesses such as M/s. Laksha Blue Metal, M/s. IVLR Concrete, M/s. VV Enterprises, M/s.