H.R. Infrastructure Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 2227/DEL/2012

• Counselvise Citation: 222720114 RSA 2012
• Duration Of Justice: 3 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 18-05-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 10-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Keywords: Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : C NEW DELHI BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO: 2227/DEL/2012 AY : - 2006-07 H.R. INFRASTRUCTURE PVT. LTD. VS. ITO K -113, 1 ST FLOOR, WARD -12(4) KRISHNA PARK EXTENSION NEW DELHI- 110 018. NEW D ELHI. (PAN AAACH7834C) (APPELLANT) (RESP ONDENT) APPELLANT BY : SH. MANOJ KUMAR, CA RESPONDENT BY : SHRI T. VASANTHAN, SR. DR DATE OF HEARING : 18.5.2015 DATE OF PRONOUNCEMENT : 02.0 6.2015 O R D E R PER G.C. GUPTA, VICE PRESIDENT THIS IS AN APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2006-07 DIRECTED AGAINST THE ORDER OF LD. CIT(A). THERE IS A DELAY OF 41 DAYS IN FILING THE PRESENT APPEAL BY THE ASSESSEE. THE ASSESSEE HAS FI LED APPLICATION OF CONDONATION OF DELAY AND ALSO AN AFFIDAVIT EXPLAINING THE REASON F OR THE DELAY. LD. DR HAS OBJECTED TO THE REQUEST OF THE ASSESSEE FOR CONDONATION OF D ELAY. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT IT IS A FIT CA SE FOR CONDONATION OF DELAY OF 41 DAYS IN FILING THE PRESENT APPEAL BEFORE THE TRIBUN AL AND WE DIRECT ACCORDINGLY. 2. GROUND OF APPEAL NO. 1 OF THE ASSESSEE IS AS UNDER :- 1. THAT LOOKING INTO FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. ASSESSING OFFICER HAS ERRED IN LAW IN DISALLOWING ESTABLISHME NT EXPENSES OF RS. 4,79,061/- ON WHOLLY UNTENABLE, ILLEGAL, ARBITRARY AND ERRONEOUS GROUNDS. THE CIT(A)-XV HAS ALSO ERRED IN CONFIRMING THE DISA LLOWANCE ON UNTENABLE AND ILLEGAL GROUNDS. HENCE, THE ADDITION MAY, AS SU CH, BE DELETED. ITA NO.2227/DEL/2012 H.R. INFRASTRUCTURE PVT. LTD. VS. ITO 2 3. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ESTABLISHMENT EXPENSES WERE WRONGLY DISALLOWED AS THE ONLY REASON OF THE DEPART MENT WAS THAT ITS INCOME FROM OPERATION HAS SLIGHTLY REDUCED FROM RS. 2.23 CRORES OF THE LAST YEAR TO RS. 2.16 CRORES DURING THE RELEVANT YEAR. HE SUBMITTED THAT THERE WAS NO CO RELATION BETWEEN THE DECLINE OF INCOME AND INCREASE OF ESTABLISHMENT EXPENSES. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE OTHER REASON GIVEN BY T HE DEPARTMENT FOR THE DISALLOWANCE WAS THAT THERE WAS INCREASE OF LABOUR CHARGES AND THE COPY OF CONTRACT WERE SUBMITTED TO THE AO. LD. DR HAS OPPOSED THE SU BMISSION OF THE LD. COUNSEL FOR THE ASSESSEE. HE SUBMITTED THAT THERE WAS SOME LABO UR PAYMENTS IN CASH AND THE ONUS WAS OF THE ASSESSEE TO PROVE THE SAME WITH DOC UMENTARY EVIDENCE. HE RELIED ON THE ORDER THE LD.CIT(A) AND AO. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PERUSED THE ORDER OF THE AO AND CIT(A). WE FIND THAT CONSIDERING THE HIGH TU RN OVER OF THE ASSESSEE AT RS. 2.33 CRORES OF THIS YEAR AS AGAINST RS. 2.23 CRORES IN THE IMMEDIATELY PRECEDING YEAR AND THE FALL IN THE INCOME FROM OPERATION BEING NO MINAL, WITH WHICH THE ASSESSEE HAS SUBMITTED THE DETAILED REASONING, WE HOLD THAT THERE WAS NO JUSTIFICATION FOR MAKING DISALLOWANCE OUT OF ESTABLISHMENT EXPENSES O N ADHOC BASIS WITHOUT POINTING OUT ANY DEFECT IN THE BOOKS OF ACCOUNT OF THE ASSES SEE AND THE CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE SAME AND ACCORDINGLY TH E DISALLOWANCE MADE IS DELETED AND THE GROUND OF APPEAL NO. 1 IS ALLOWED. 5. GROUND OF APPEAL NO. 2 OF THE ASSESSEE IS AS UNDER :- 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. ASSESSING OFFICER HAS ERRED IN LAW IN ADDITING INTEREST (JCB) CHARGES ) AMOUNTING TO RS.98380 U/S 43(B) ON WHOLLY UNTENABLE, ILLEGAL, ARBITRARY A ND ERRONEOUS GROUNDS. THE CIT(A)-XV HAS ALSO ERRED IN CONFIRMING THE ADDI TION ON UNTENABLE AND ILLEGAL GROUNDS. HENCE THE ADDITION MAY, AS SUCH, B E DELETED. ITA NO.2227/DEL/2012 H.R. INFRASTRUCTURE PVT. LTD. VS. ITO 3 6. WE HAVE HEARD THE PARTIES. WE FIND THAT TH E ISSUE OF DISALLOWANCE OUT OF INTEREST ON ACCOUNT OF NO DEDUCTION OF TDS IS COVER ED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF DELHI TRIBUNAL IN M/S. MALHOTRA CAB LES PVT. LTD. VS. ITO IN ITA NO. 4712/DEL/2013 DATED 1.4.2015 WHEREIN HELD THAT THE PROVISION OF SECTION 40(A)(IA) OF THE ACT SHALL APPLY ONLY TO THE AMOUNT PAYABLE AS ON THE LAST DAY OF THE RELEVANT ACCOUNTING YEAR. ACCORDINGLY THE GROUND OF APPEAL NO. 2 IS ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY T HE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 02.06.2015. SD/- SD/- (T.S. KAPOOR) (G.C. GUPTA) ACCOUNTANT MEMBER VICE PRESIDE NT DATED: 02.06.2015 *VEENA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER DY. REGISTRAR SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 18.5.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 19.5.2015 ITA NO.2227/DEL/2012 H.R. INFRASTRUCTURE PVT. LTD. VS. ITO 4 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY THE SECOND MEMBER 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER 7. DATE OF FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER