DCIT CIr, 1 (1), New Delhi V. Ajay Dhawan, 201 Padam Chambers, New Delhi

ITA 2239/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8035 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-06-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 09-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRATIMA KAUSHIK
• Assessee Lawyers: P K CHOUDHARY SANJ IV KUMAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA : VICE PRESIDENT; A ND SRI AKASH DEEP JAIN : JUDICIAL MEMBER ITA NO. 2239/DEL/08 ASSTT. YR: 2003-04 DCIT, CIRCLE 1(1), VS. MR. AJAY DHAWAN, NEW DELHI. 201, PADAM CHAMBERS, 28/3925, PADAM SINGH CHAMBERS, KAROL BAGH, NEW DELHI. PAN/GIR NO. ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : MS. PRATIMA KAUSHIK SR. DR RESPONDENT BY : SHRI P.K. CHOUDHARY/ SANJ IV KUMAR CA O R D E R PER G.E. VEERABHADRAPPA, V.P: THIS APPEAL, BY THE REVENUE , ARISES OUT OF THE ORD ER DATED 19-6-2007 OF THE CIT(A), NEW DELHI, FOR A.Y. 2003-04. THE GRI EVANCE OF THE DEPARTMENT IS IN THE FOLLOWING THREE GROUNDS: 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS. 2,59,850/- OUT OF TOTAL ADDITION OF RS. 4,59,850/- MADE ON ACCOUNT OF SERVICES CHARGES AS THE ASSESSEE HAS FAI LED TO SUBSTANTIATE HIS CLAIM BY FILING BILLS AND VOUCHERS. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS. 2,23,739/- OUT OF TOTAL ADDITION OF RS. 2,73,739/- MADE ON ACCOUNT OF CONSULTANCY CHARGES PAID TO PROFESSIONAL S AS ASSESSEE HAS FAILED TO FILE ANY DETAIL IN THIS REGARD. 3. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS. 30,00,000/- MADE ON ACCOUNT OF INVE STMENT IN PROPERTY AS THE ASSESSEE HAS FAILED TO FILE THE HEARING OF THIS APPEAL. 2 2. THE ASSESSEE IS AN INDIVIDUALS AND RUNS AN ADVE RTISEMENT AGENCY. THE ASSESSEE HAS CLAIMED PAYMENT OF SERVICES CHARGES T O THE EXTENT OF RS. 22,99,253/-. ACCORDING TO THE AO, NO DETAILS WERE F ILED AND THEREFORE 1/5 TH WAS TO BE DISALLOWED, WHICH RESULTED IN AN ADDITION OF RS. 4,59,850/-. AFTER CALLING FOR THE REQUIRED DETAILS, THE CIT(A) WAS OF THE VIEW THAT THE ASSESSEE HAD MAINTAINED PROPER BOOKS OF ACCOUNT AND THE AO WAS NOT JUSTIFIED IN DISALLOWING 20% OF THE EXPENSES ON AD HOC BASIS. IN FACT THE DETAILS FILED BY THE ASSESSEE IN THE APPEAL PROCEEDINGS WERE SENT TO THE AO FOR COMMENTS. 2.1. WE HAVE HEARD BOTH SIDES AND GONE THROUGH THE DETAILS. THE AO HAS NOT POINTED OUT ANY DEFECT IN THE MAINTENANCE OF BO OKS OF ACCOUNT BY THE ASSESSEE. HE SIMPLY RESORTED TO MAKE AD HOC DISALLO WANCE AND THE CIT(A), AFTER CALLING FOR THE REPORT FROM THE AO, HAS CORRE CTLY GAVE THE RELIEF TO THE ASSESSEE. WE DECLINE TO INTERFERE. 3. AS REGARDS THE SECOND ISSUE, THE AO HAS DISALLOW ED THE ENTIRE CLAIM OF RS. 2,73,739/-. THE CIT(A) APPRECIATED THE FACT THA T THE ORGANIZATION WAS HIGHLY SKILLED ADVERTISING AGENCY AND BOUND TO HIRE TECHNICAL CONSULTANTS TO EXECUTE THEIR JOB WORK AND THE CONSULTANCY CHARES W ERE INCURRED IN CONNECTION WITH THE BUSINESS. FOR THIS REASON THE C IT(A) DELETED THE ADDITION OF RS. 2,73,739/-. 3.1. WE HAVE HEARD BOTH SIDE SAND GONE THROUGH THE DISCUSSIONS IN THE IMPUGNED ORDERS. WE ARE UNABLE TO FIND ANY INFIRMIT Y IN THE ORDER OF CIT(A). AFTER CALLING FOR ALL THE DETAILS, THE LEAR NED CIT(A) HAS PROPERLY APPRECIATED THE BUSINESS NEEDS OF THE ASSESSEE AND DELETED THE ADDITION. WE DECLINE TO INTERFERE. 4. THE NEXT DISPUTE RELATES TO AN ADDITION OF RS. 3 0,00,000/- MADE ON ACCOUNT OF INVESTMENT IN PROPERTY. THE ASSESSEE HAD PURCHASED A PROPERTY AT KAROL BAGH, NEW DELHI FOR RS. 2,70,000/- IN THE CAP ITAL ACCOUNT. THE AO 3 WAS OF THE VIEW THAT NO DETAILS WERE FILED AND HE ESTIMATED THE VALUE AT RS. 30,00,000/- AND MADE THE ADDITION. 4.1. THE LEARNED CIT(A) FOUND THAT THE PROPERTY WAS CARRIED FORWARD FROM THE EARLIER YEAR AND PROOF OF PURCHASE OF PROPERTY WAS ENCLOSED WITH THE DETAILS FURNISHED TO HIM. THE CIT(A) WAS OF THE VIE W THAT THE ADDITION CANNOT BE SUSTAINED. 4.2. WE HAVE GONE THROUGH THE DISCUSSIONS IN THE IM PUGNED ORDER. AFTER HEARING THE PARTIES WE SEE NO REASON TO INTERFERE I N THE ORDER OF CIT(A). AFTER ALL THE PROPERTY IS ONE WHICH WAS CARRIED FOR WARD FROM THE EARLIER YEAR. PURCHASE OF THE PROPERTY WAS IN THE YEAR OF 1 998 AND THERE IS ABSOLUTELY NO BASIS FOR MAKING AN ADDITION TO THE EXTENT OF RS . 30,00,000/-. THE ADDITION HAS BEEN CORRECTLY DELETED. WE DECLINE TO INTERFERE. 5. IN THE RESULT, REVENUE S APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 1-6-2009. ( AKASH DEEP JAIN ) ( G.E. VEERABHADRA PPA ) JUDICIAL MEMBER VICE PRESIDENT DATED: 1-06-2009. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR 4