R Systems International Ltd, New Delhi V. JCIT Soecial Range- 7, New Delhi

ITA 1590/DEL/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 3987 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2017-2018
• Appeal Filed On: 13-09-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘F’ NEW DELHI SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND DR. BRR KUMAR, ACCOUNTANT MEMBER ITA No. 1590/Del/2020 Assessment Years: 2017-18 R. Systems International Ltd., GF-L-A, 6, Devika Tower, Nehru Place, New Delhi Vs. JCIT, Special Range-7, New Delhi PAN :AABCE9541B (Appellant) (Respondent) ORDER PER SAKTIJIT DEY, JUDICIAL MEMBER: This is an appeal by the assessee against the order dated 21.08.2020 of learned Commissioner of Income-Tax (Appeals)-38, New Delhi pertaining to assessment year 2017-18. Assessee by Shri A.T. Panda, Adv. Department by Shri Sankar Gupta, Sr. DR Date of hearing 07.07.2022 Date of pronouncement 23.09.2022 2 ITA No.1590/Del./2020 2. The dispute in the present appeal is confined to disallowance of an amount of Rs.8,75,000, being expenditure incurred towards professional charges. 3. Briefly, the facts are, the assessee is a resident corporate entity. For the assessment year under dispute, assessee filed its return of income on 21.11.2017 declaring an income of Rs.54,02,89,090. 4. In course of assessment proceedings, the assessing officer noticed that assessee has debited expenditure of Rs.8,75,000 towards professional charges paid to M/s. S.K. Relan & Co. in relation to Income-Tax proceedings. Holding that the said expenditure was not incurred for business purposes, the assessing officer disallowed the same. 5. Learned Commissioner (Appeals) also upheld the disallowance. 6. We have considered rival submission and perused the material available on record. 7. As far as the factual aspect of the matter is concerned, there is no dispute that the disputed amount was paid to a professional for appearing in assessee’s Income-Tax proceedings. The departmental authorities have concluded that the expenditure is not allowable as it is 3 ITA No.1590/Del./2020 connected to assessee’s personal Income Tax related matters and not to the business. In our view, the aforesaid reasoning of the departmental authorities is unacceptable. Defending income-tax proceedings is certainly in connection with the business of assessee as it ultimately, will have an impact on assessee’s business and the profit earned there from. Any adverse order from the income-tax authorities will certainly have a detrimental impact on assessee’s business activities. Therefore, in our view, the expenditure incurred by the assessee in connection with the Income-Tax proceedings certainly are for the purpose of business. Accordingly, allowing assessee’s claim, we delete the disallowance made. 8. In the result, the appeal is allowed. Order pronounced in the open court on 23rd September, 2022. Sd/- Sd/- ( DR. BRR KUMAR ) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 23 rd September, 2022. Mohan Lal 4 ITA No.1590/Del./2020 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Sl. No. Particulars Date 1. Date of dictation (Order drafted through Dragon software): 19.09.2022 2. Date on which the draft of order is placed before the Dictating Member: 21.09.2022 3. Date on which the draft of order is placed before the other Member: .09.2022 4. Date on which the approved draft of order comes to the Sr. PS/PS: 22.09.2022 5. Date of which the fair order is placed before the Dictating Member for pronouncement: 22.09.2022 6. Date on which the final order received after having been singed/pronounced by the Members: 23.09.2022 7. Date on which the final order is uploaded on the website of ITAT: 26.09.2022 8. Date on which the file goes to the Bench Clerk 26.09.2022 9. Date on which files goes to the Head Clerk: 10. Date on which file goes to the Assistant Registrar for signature on the order: 11. Date of dispatch of order: