G Galaxy Infra Space Pvt. Ltd., Ahmedabad V. The Dy.CIT, Circle-2(1)(1), Ahmedabad

ITA 237/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8077 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 01-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital expenditure
• Section: 40A(3); 234B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , , BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO.237/AHD/2016 ( / ASSESSMENT YEAR : 2012-13) G GALAXY INFRA SPACE PVT.LTD. F-14, G GALAXY COMPLEX OPP.GALAXY CINEMA,NH N0.08, NARODA, AHMEDABAD / VS. DCIT CIRCLE2(1)(1) AHMEDABAD % ./ ./ PAN/GIR NO. : AADCG 6607 ( %( / APPELLANT ) .. ( )%( / RESPONDENT ) %(* / APPELLANT BY : NONE )%( +* / RESPONDENT BY : SHRI SAURABH SINGH, SR.DR , - + / DATE OF HEARING 11/06/2018 ./01 + / DATE OF PRONOUNCEMENT 18/06/2018 / O R D E R PER MS. MADHUMITA ROY - JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A)-, AHMEDABAD DATED 15.10.2015 FOR THE ASSESSMENT YEAR 2012-13. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1.0 THE ORDER FRAMED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IS ERRONEOUS IN THE EYES OF LAW AND CONTRARY TO THE FACTS. THE CIT(A) E RRED IN PASSING AN EX-PARTE ORDER WHICH IS BAD IN LAW. THE NOTICES WERE EITHER BAD IN LAW OR NOT CAPABLE OF COMPLIANCE OR WERE COMPLIED WITH. THE ORDER BE QUASHED. 2.0 THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING DISALLOWANCE OF RS. 6,68,500/- BEING EXPENDITURE ON FOREIGN TRAVELS . THE APPELLANT SUBMITS THAT EXPENDITURE WAS INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS AND FURTHER THE NEXUS WAS ESTABLISHED WITH EVIDENCES. T HE DISALLOWANCE OF RS. 6,68,500/- IS CONTRARY TO THE FACTS AND PROVISIONS OF LAW. THE DI SALLOWANCE OF BE QUASHED. K , - 2 - ITA NO.237/AHD/ 2016 G GALAXY INFRA SPACE PVT.LTD. VS. DCIT ASST.YEAR 2012-13 2.1 THE APPELLANT WITHOUT PREJUDICE TO ABOVE SUBMIT S THAT DISALLOWANCE OF RS.6,68,500/- IS EXCESSIVE. THE DISALLOWANCE IF ANY ON ANY TECHNI CAL GROUND IS UPHELD IT BE RESTRICTED TO A NOMINAL AMOUNT. 3.0 THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING DISALLOWANCE OF RS.12,33,673/- OUT OF LOAN PROCESSING CHARGES AND M ORTGAGE CHARGES HOLDING THEM TO BE EXPENDITURE OF CAPITAL NATURE. THE APPELLANT SUBMIT S THAT EXPENSES ARE OF REVENUE NATURE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS BECAUSE THE LOANS WERE FOR THE WORKING CAPITAL I.E. ON CURRENT ACCOUNT. TH E DISALLOWANCE OF RS.12,33,673/- IS ERRONEOUS. THE DISALLOWANCE BE QUASHED. 3.1 THE APPELLANT WITHOUT PREJUDICE TO ABOVE SUBMIT S THAT IN VIEW OF PROVISIONS OF SECTION 2(28) EXPENDITURE OF RS.12,33,673/- FELL WITHIN PUR VIEW OF INTEREST AND THEREFORE DEDUCTIBLE UNDER SECTION 36(I)(III). THE APPELLANT SUBMIT THAT DISALLOWANCE BE THEREFORE QUASHED. 3.2 THE APPELLANT WITHOUT PREJUDICE TO ABOVE SUBMIT S THAT IN ANY EVENT DISALLOWANCE OF RS. 12,33,673/- IS EXCESSIVE AND THE SAME BE SUBSTA NTIALLY REDUCED. 4.0 THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING ACTION OF INVOKING PROVISIONS OF SECTION 40A(3) AND DISALLOWANCE OF RS . 1,98,070/-. THE APPELLANT SUBMITS THAT PAYMENTS FELL WITHIN PURVIEW OF RULE 6DD AND T HEREFORE THE ASSESSING OFFICER OUGHT NOT TO HAVE MADE ANY DISALLOWANCE. THE DISALLOWANCE OF RS.1,98,070/-BE QUASHED. 4.1 THE APPELLANT WITHOUT PREJUDICE TO ABOVE SUBMIT S THAT DISALLOWANCE OF RS.1,98,070/- IS EXCESSIVE. THE DISALLOWANCE BE SUBSTANTIALLY RED UCED. 5.0 THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING DISALLOWANCE OF RS.14,80,736/- OUT OF INTEREST. THE APPELLANT SUBM ITS THAT EACH AND EVERY AMOUNT OF RS. 2.78 CRORES WAS UTILIZED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS. THE DISALLOWANCE IS ERRONEOUS AND CONTRARY TO THE PROVI SIONS OF LAW. INTEREST OF RS.14,80,736/- IS DEDUCTIBLE U/S 36(I)III). THE DIS ALLOWANCE OF RS. 14,80,736/- THEREFORE BE QUASHED. 6.0 THE CIT(A) ERRED IN UPHOLDING DEMAND OF RS.18,6 0,500/-. THE APPELLANT SUBMITS THAT THE AO BE DIRECTED TO COMPUTE TAX ON THE INCOME AND ALLOW CREDIT AS PER THE LAW. THE AO BE DIRECTED TO DELETE INTEREST CHARGED U/SS 234B AN D 234C. 3. IT IS NOTICED THAT WHEN THE MATTER CAME UP FOR HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE-APPELLANT DESPITE NOTICE HAVING BEE N SENT BY REGISTERED POST (AD ON RECORD). IT THUS APPEARS THAT THE ASSESSEE IS NOT INTERES TED TO PROCEED WITH THE MATTER. - 3 - ITA NO.237/AHD/ 2016 G GALAXY INFRA SPACE PVT.LTD. VS. DCIT ASST.YEAR 2012-13 THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. B. N. BHATTACHARGEE AND ANOTHER, 118 ITR 461(SC) OBSERVED THAT PREFERRING AN APPEAL MEAN S EFFECTIVELY PURSUING IT. HONBLE M.P. HIGH COURT IN THE CASE OF ESTATE OF LATE TUKOJ IRAO HOLKAR VS. CWT, 223 ITR 480(M.P.) DISMISSED THE REFERENCE FILED BY THE ASSE SSEE FOR NOT TAKING NECESSARY STEPS. SIMILAR VIEW IS TAKEN BY I.T.A.T., DELHI BENCH IN T HE CASE OF MULTIPLAN INDIA LTD., 38 ITD 320. CONSIDERING THE ABOVE, IT APPEARS THAT TH E ASSESSEE IS NOT INTERESTED IN PROSECUTING ITS APPEAL. WE, THEREFORE, DISMISS THE APPEAL FILED BY THE ASSESSEE FOR NON- PROSECUTION. 4. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS D ISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 18/06/2018 SD/- SD/- ( ) ( ) ( PRADIPKUMAR KEDIA ) ( MS. MADHUMI TA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 18/ 06 /2018 5.., ,.,../ T.C. NAIR, SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. %( / THE APPELLANT 2. )%( / THE RESPONDENT. 3. 67 8 / CONCERNED CIT 4. 8 ( ) / THE CIT(A)-7, AHMEDABAD 5. 9: ;,7 , 7 1 , 6 / DR, ITAT, AHMEDABAD 6. ; => - / GUARD FILE. / BY ORDER, ) 9 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD