ACIT, New Delhi V. M/s. Haryana D.D. Auto Pvt. Ltd., New Delhi

ITA 1746/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3823 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 09-06-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 11-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MONA MOHANTY
• Assessee Lawyers: MONGA
• Keywords: Business expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C NEW DELHI) BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO.1746/DEL/2011 ASSESSMENT YEAR : 2007-08 ACIT, VS. M/S HARYANA DD AUTO (P) LTD., B-30, CIRCLE 12(1), G.T. KARNAL ROAD AREA, NEW DELHI NEW DELHI PAN NO.AAACH 0653 H (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. MONA MOHANTY, SR. DR RESPONDENT BY : MS. MONGA, ADVOCATE ORDER PER I.P. BANSAL, JM: THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIRECTE D AGAINST THE ORDER DATED 15 TH NOVEMBER, 2010 PASSED BY THE LEARNED CIT(A), NEW DELHI FOR ASSESSMENT YEAR 2007-08. THE ONLY GROUND OF APPEAL READS AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF `27,10,200/- AS COMMISSION PAID MADE BY ASSESSING OFFICER. 2. THE ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF DEVELOPMENT OF LAND FOR RESIDENTIAL AND COMMERCIAL P URPOSES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER N OTICED THAT ASSESSEE HAS PAID COMMISSION OF `7 LACS TO SHRI ARUN M ALIK AND `20,10,200/- TO MR. RAJIV CHAUDHRY AND THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SAME. IN ABSENCE OF COGENT REPLY FROM TH E ASSESSEE, THE AMOUNT OF `27,10,200/- WAS ADDED TO THE INCOME RETUR NED AT NIL AND THUS THE INCOME OF THE ASSESSEE HAS BEEN ASSESSED AT `27,10,2 00/-. 2 VIDE ASSESSMENT ORDER DATED 26 TH NOVEMBER, 2009 PASSED U/S 143(3) OF THE INCOME-TAX ACT 1961 (THE ACT). 2.1 IN THE STATEMENT OF FACTS, IT WAS SUBMITTED BY THE ASSESSEE BEFORE CIT(A) THAT THE COMMISSION TO BOTH THE AFOREME NTIONED PERSONS WAS PAID DURING THE PREVIOUS ASSESSMENT YEAR AND TDS WAS D EDUCTED AND PAID. THE COMMISSION WAS PAID TO FINALIZE THE DEA L FOR PURCHASING THE PROPERTY. ALL DETAILS AND FACTS WERE SUBMITTED DU RING THE COURSE OF ASSESSMENT YEAR 2006-07 AND THIS CLAIM OF THE ASSESSEE WAS AC CEPTED. THE ASSESSMENT FOR ASSESSMENT YEAR 2006-07 WAS COMPLETED U/S 143(3) OF THE ACT AND A COPY OF ORDER WAS ALSO FURNISH ED TO THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDING S. 2.2 IN THE SUBMISSIONS MADE BEFORE CIT(A), IT WAS SUBMITT ED THAT THE AFOREMENTIONED COMMISSION WAS PAID ON ACCOUNT OF PURCH ASE OF PROPERTY AND CAPITALIZED UNDER THE HEAD CAPITAL EX PENDITURE INCURRED FOR PURCHASE OF PROPERTIES. IT WAS DULY SHOWN IN THE SCHEDULE B OF THE AUDITED BALANCE SHEET. COMMISSION WAS PAID DURING THE FINANCIAL YEAR 2005-06 RELEVANT TO ASSESSMENT YEAR 2006-07. BANK STATEMENT AS WELL AS ACCOUNT OF MR. RAJIV CHAUDHRY AND SHRI ARU N MALIK WERE ALSO PRODUCED. THIS ISSUE WAS DULY CONSIDERED DURING THE COU RSE OF ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2006-07 WHICH WAS ALSO ASSESSED U/S 143(3) OF THE ACT. ASSESSMENT ORDER WAS ALSO PRO DUCED. IT WAS SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROC EEDINGS FOR ASSESSMENT YEAR 2006-07 ALL THESE PAPERS WERE VERIFIED BY THE ASSESSING OFFICER AND A QUERY WAS RAISED. COPY OF SUBMISSIO NS WAS ALSO FILED AND THUS, IT WAS SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER DOES NOT PERTAIN TO THE YEAR UNDER CON SIDERATION. UPON THESE SUBMISSIONS, LEARNED CIT(A) HAS RECORDED A FIN DING THAT THE COMMISSION WAS NOT DEBITED TO PROFIT AND LOSS ACCOUNT AN D IT WAS CAPITALIZED. THE COMMISSION WAS PAID DURING THE FINAN CIAL YEAR 2005- 06, AND TO SUPPORT SUCH FACT, BANK STATEMENTS AS WELL AS ACCOUNTS OF 3 BOTH THE PERSONS WERE PRODUCED AND PERUSED, AND THE MA TTER PERTAINED TO ASSESSMENT YEAR 2006-07 WHICH IS ALSO ASSESSED U /S 143(3) OF THE ACT. COPY OF ASSESSMENT ORDER WAS PLACED ON RECORD. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR ASSESSMENT YE AR 2006-07, THIS ISSUE WAS CONSIDERED BY THE ASSESSING OFFICER, WHICH IS APPARENT FROM THE SUBMISSIONS MADE IN THAT PROCEEDINGS A ND ON THESE FINDINGS, HE HAS DELETED THE ADDITION. THE DEPARTMEN T IS AGGRIEVED, HENCE, IN APPEAL. 2.3 LEARNED DR RELIED UPON THE ORDER OF ASSESSING OFFIC ER AND AS AGAINST THAT LEARNED AR OF THE ASSESSEE ON THE BASIS OF TH E FINDINGS RECORDED BY THE LEARNED CIT(A) SUBMITTED THAT RELIEF HAS RIGHTLY BEEN GIVEN TO THE ASSESSEE. 3. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. THE AMOUNT OF COMMISSION P AID BY THE ASSESSEE DOES NOT RELATE TO THE YEAR UNDER CONSIDERATION. IT WAS NOT CLAIMED AS BUSINESS EXPENDITURE AS IT WAS CAPITALIZED. TH E REQUIRED EVIDENCE TO ESTABLISH THESE FACTS WERE PLACED BEFORE LE ARNED CIT(A). IN THIS VIEW OF THE SITUATION, WE FIND NO INFIRMITY IN T HE ORDER OF LEARNED CIT(A) VIDE WHICH THE REQUIRED RELIEF HAS BEEN GRANT ED TO THE ASSESSEE. THEREFORE, WE DECLINE TO INTERFERE AND THE APPEAL F ILED BY THE REVENUE IS DISMISSED 4. IN THE RESULT, THE APPEAL OF THE REVENUE HAVING N O MERITS IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 09.06. 2011. SD/- SD/- ( SHAMIM YAHYA ) ( I.P. BANSAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 09.06.2011. NS 4 COPY FORWARDED TO:- 1. ACIT, CIRCLE 12(1), NEW DELHI. 2. M/S HARYANA D.D. AUTO PVT. LTD., B-30, G.T. KARNA L ROAD AREA, NEW DELHI. 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. BY ORDER (ITAT, NEW DELHI).