N K Securities, Gurugram V. Pr Commissioner Of Income Tax, Noida, Noida

ITA 1630/DEL/2021

AI Insights

The case involves an appeal by N K Securities against the revisional order of the Principal Commissioner of Income Tax, Noida, which had set aside the assessment order passed by the Assessing Officer for the assessment year 2015-16. The revisional authority had found the assessment order to be erroneous and prejudicial to the interest of the revenue, specifically concerning the disallowance of expenses amounting to Rs. 14,84,476 claimed for consumables. The assessee contended that these expenses were incurred in the relevant financial year and were substantiated by necessary ledger accounts and bank statements. The Tribunal, after considering the submissions and evidence, concluded that the revisional authority's order did not meet the twin conditions of being erroneous and causing prejudice to the revenue, as the expenses were accounted for in the correct financial year.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121620 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 27-08-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 07-11-2021
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VAIBHAV GOEL
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E” DELHI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.1630/DEL/2021 Assessment Year 2015-16 N K Securities C/o CA (Dr) Vinay K Goel 75 Navyug Market 1 st Floor, Ghaziabad Uttar Pradesh Vs. Principal Commissioner of Income Tax, Noida TAN/PAN: AAIFN7457N (Appellant) (Respondent) Appellant by: Shri Vaibhav Goel, CA Respondent by: Shri Subhra Jyoti Chakraborty, CIT-DR Date of hearing: 28 08 2023 Date of pronouncement: 05 09 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: The capti oned appeal has been f il ed at t he i nst ance of t he assessee against t he r evi sional or der of t he l d. Pri nci pal Co mmi ssi oner of Inc o me Tax, Noi da ( ‘Pr. CIT’ i n s ho rt) dated 24. 03. 2021 wherei n orde r passed b y the Assessing Offi cer ( AO) under Secti on 143( 3) of t he I nc ome Ta x Act , 1961 ( the Act ) dat ed 20. 11. 2017 concerni ng AY 2015-16 was hel d t o be er roneous in so far as pr ej udi ci al to the i nterest of the revenue wi t hin t he mea ning of Sect io n 263 of the Act . 2. As per t he grounds of appe al , t he assessee has chal l enged the revi si onal jur i sdi ct ion usur pe d b y t he Pr .CI T in exercise of power co nfer red under Secti on 263 of the Act on t he g rounds I.T.A. No.1630/Del/2021 2 that expe nses i ncur red i n respect of cons u mable to t he t une of Rs.14,8 4, 476/ - wer e not act ual l y i nc urre d whol l y a nd excl usivel y f or t he p urposes of busi ness duri ng t he relevant pre vious f inanci al year i .e., F. Y. 2013-14. 3. We have car eful l y consi dered t he ri val s ub mi ssions and per used t he materi al avail able on rec or d. 4. The l d. counsel for the assessee cont ends t hat the Pr .CI T has mi sdir ected i t sel f i n law and on fact s i n set ting asi de the assess ment or der and re mandi ng t he matt er back t o the Assessi ng Of fi ce r f or re- co mp uti ng the inco me b y d isal lowi ng the afor esai d expe nses. It i s t he case of t he assessee that as per gen erall y acce pt ed accou nti ng pri nci pl es, consumables ar e recogni zed as cost duri ng the year/peri od of act ual consu mpti on or ut il i zati on i r re specti ve of the ye ar of pur chase; the li abil it y to pa y act ual l y cr ys t al li zed duri ng t he ye ar under c onsiderati on, whic h was dul y s ubst anti at ed b y the necessar y le dger accounts and bank st at eme nt ; the consu ma bl es pur chased thr ough t hese invoices could not have bee n ut i li zed in t he prece di ng AY 2 014- 15 as t he y w er e purc hased at t he fag-end of t he mont h of Mar ch 2014 (rele vant t o the pr ecedi ng A Y 2014- 15); a nd t her efor e, al l evi de nces avai l abl e on re cor d suggested that t hese coul d be ut il ized onl y duri ng t he year under consi derat io n i. e. , AY. 2015- 16. 5. We fi nd pal pabl e mer it i n t he plea r ai sed o n be hal f of the assessee. On fact s , t he assessee submi tt ed t hat f our bi ll s of M/s. Forci bl e IT Sol ut ions P vt. Lt d. dat ed 03. 03. 2014, 19. 03. 2014, 22. 03. 2014 an d 2 8.0 3.2014 aggr egati ng to Rs. 14, 84, 476/ - have I.T.A. No.1630/Del/2021 3 bee n accounte d f or in F.Y. 2014-15 as t he materi al so pur chased were ut il ized in F. Y. 2014- 15 and not in F. Y. 2013-14. Be t hat as i t ma y, t he di sal lowance on ac count of pri or peri od exp endi ture wi ll have t he i denti cal and equal opposi te ef fect of reduct io n of i ncome in t he preceding assessment year . Thus, the result ant t i mi ng di fference i n account i ng f or t h e bi l ls i n Assess ment Year 2014- 15 i n questi on r at her t han i n F. Y. 2013- 14 t o whi c h the bi ll s rel at es t o, b y i tself, woul d not cause an y prejudice t o t he i nterest of the r evenue per se. Needless to say, the exerci se of power conf er r ed un der Sect ion 263 is governed b y t win condit io ns; ( i) t he or der s houl d be er r oneous (i i) the or der must cause pr ej udi ce t o t he i nt erest of t he revenue. Bot h the condit ions must co-e xi st . I n the pr esent case, whil e the acti on of the asse ssee ma y po ssi bl y be call ed err oneous, i n t he ul ti mate result , such al leged er r or has not cause d an y prejudice to t he i nterest of the revenue per se. The expenses have been cl ai me d onl y i n one ye ar. The t wi n r equi re ment s of S ecti on 263 ar e thus not si mul t aneousl y me t. We t hus set aside and quash t he revisi onal or der and r estor e t he posi ti on t aken b y t he Assessi ng Of fi cer. 6. I n t he resul t, t he appeal of t he assessee is allowed. Order pronounced in the open Court on 05/09/2023 Sd/- Sd/- [SAKTIJIT DEY] [PRADIP KUMAR KEDIA] VICE PRESIDENT ACCOUNTANT MEMBER DATED: /09/2023 Prabhat Copy forwarded to: