Deputy Commissioner of Income Tax, Circle-2, Pune V. M/s. B U Bhandari Tempo (Dept), Pune

ITA 161/PUN/2023

AI Insights

The case involves an appeal by the Revenue against the order of the National Faceless Appeal Centre (NFAC), Delhi, which had directed the Assessing Officer (AO) to allow certain business expenditure claimed by M/s. BU Bhandari Tempo for the assessment year 2014-15. The AO had disallowed the expenditure on the grounds that the assessee had not carried out any business activity during the year. However, the NFAC, referencing a previous Tribunal decision for the assessee's case in A.Y. 2013-14, found that the assessee was indeed engaged in business activities and directed the AO to allow the claimed expenditures. The Tribunal upheld the NFAC's decision, noting that the facts had not changed since the previous assessment year and that the assessee had provided sufficient evidence of ongoing business activities.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132912 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-06-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 08-02-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.161/PUN/2023 धििाारण वर्ा / Assessment Year : 2014-15 Dy. Commissioner of Income Tax, Circle – 2, Pune ......अपीलार्थी / Appellant बिाम / V/s. M/s. BU Bhandari Tempo (Dept), A-3, Abhimanshree Society, Pashan Road, Pune – 411008 PAN : AABFB2262N ......प्रत्यर्थी / Respondent Assessee by : Dr. Vardhaman L. Jain Revenue by : Shri Ramnath P. Murkunde सुनवाई की तारीख / Date of Hearing : 20-06-2023 घोषणा की तारीख / Date of Pronouncement : 21-06-2023 आदेश / ORDER PER S.S. VISWANETHRA RAVI, JM : This appeal by the Revenue against the order dated 09-01-2023 passed by the National Faceless Appeal Centre (“NFAC”), Delhi for assessment year 2014-15. 2. The Revenue raised two grounds of appeal amongst which the only issue emanates for our consideration is as to whether the CIT(A), NFAC, Delhi justified in deleting the addition on account of disallowance of expenditure in the facts and circumstances of the case. 2 ITA No.161/PUN/2023, A.Y. 2014-15 3. We note that the assessee is a partnership firm, filed return of income declaring a total income at Rs.Nil. The AO found expenditure claimed under the head of business and profession and requested the assessee to explain the nature of business activity, purpose of loan received from Janta Sahkari Bank. In explanation, the assessee submitted that “present business has been seized and the partners are on the lookout for a new dealership in automobiles”. In response to the second query, the assessee submitted that “loan from Janta Sahkari Bank is for the purpose of business”. The AO did not accept the reply of the assessee and treating there was no business activity for the assessee for the last five years, deputed its Inspector onsite verification. According to the AO that there was no business activity carried out by the assessee and the old business of the assessee has been shut down since last few years and determined the income of the assessee at Rs.1,92,72,800/-. The NFAC, Delhi by following the order of this Tribunal in assessee’s own case for A.Y. 2013-14 directed the AO to allow the expenditure. 4. Before us, the ld. AR submitted that there was no change in the facts of the case as compared to A.Y. 2013-14 and drew our attention to assessment order at para 4.1 and argued that the partners of the assessee were on lookout for a new dealership in automobiles and the interest paid by the assessee to Janta Sahkari Bank was on a loan availed for the purpose of business. He submitted that the order of this Tribunal for A.Y. 2013-14 maybe followed and supported the order of CIT(A), NFAC, Delhi. 5. We note that, for the A.Y. 2013-14, the AO computed business income at Rs.19,09,431/- being net income earned interest on debit balance of the partners which is evident from computation in para 4 of the assessment order, but however, denied expenses of Rs.70,13,404/- by 3 ITA No.161/PUN/2023, A.Y. 2014-15 holding that the assessee had not carried out any business activity during the year under consideration. The said disallowance was deleted by this Tribunal in its order dated 01-11-2019 by holding that the conclusion of the AO that the assessee not carried out any business activity is contrary to the facts. Considering the totality of the facts, the Tribunal directed the AO to delete the addition of Rs.70,13,404/- made on account of disallowance of expenditure. The ld. DR did not bring on record view contrary to the findings of this Tribunal in assessee’s own case for A.Y. 2013-14. Therefore, we find no infirmity in the order of CIT(A), NFAC, Delhi. Thus, the grounds raised by the Revenue fails and are dismissed. 6. In the result, the appeal of Revenue is dismissed. Order pronounced in the open court on 21 st June, 2023. Sd/- Sd/- (R.S. Syal) (S.S. Viswanethra Ravi) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; दिनाांक / Dated : 21 st June, 2023. रदव आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The concerned CIT, Pune. 4. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 5. गार्ड फ़ाइल / Guard File. //सत्यादपत प्रदत// True Copy// आिेशानुसार / BY ORDER, वररष्ठ दनजी सदचव / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune