ACIT, New Delhi V. Sh. Lajinder Singh Bawa, New Delhi

ITA 2746/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74115 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 16-01-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 06-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S N BHATIA
• Assessee Lawyers: DINESH CHITKARA
• Keywords: Opportunity of being heard
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D : NEW DELHI BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOU NTANT MEMBER ITA NO. 2746/DEL/2012 ASSESSMENT YEAR: 2006-07 ACIT, VS. LAJINDER SINGH BAWA, CIRCLE 23 (1), N-86, PANCHSHILLA PARK ROOM NO. 190, NEW DELHI 110 017. (PAN ADAPB5044L) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.N. BHATIA, DR RESPONDENT BY : SHR I DINESH CHITKARA, CA ORDER PER I.C. SUDHIR, JUDICIAL MEMBER THE REVENUE HAS QUESTIONED FIRST APPELLA TE ORDER SOLELY ON THE GROUND THAT THE LD. CIT(A) HAS ERRED IN ALLOWING THE BUSI NESS EXPENSES OF RS. 15,25,255/- OUT OF THE TOTAL DISALLOWANCE OF EXPENS ES OF RS. 18,23,265/-. 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. 3. THE FACTS RELEVANT ARE THAT THE ASSESSEE, AN INDIVIDUAL WAS RENDERING CONSULTANCY SERVICES TO BIL TRADING PVT. LTD.. DURI NG THE YEAR HE CLAIMED EXPENSES OF RS. 18,23,265/- INCURRED ON UTILITY SER VICES LIKE ELECTRICITY AND WATER ETC. SECURITY, CAR HIRING, REPAIR AND MAINTENANCE O F OFFICE, TOUR AND TRAVEL, REFRESHMENT, VEHICLES RUNNING, INTEREST ON LOAN, BA NK CHARGES, PROFESSIONAL FEE, ITA NO. 2746/DEL/2012 2 BUSINESS PROMOTION, AUDIT FEES, SALARY OF STAFF, ME MBERSHIP FEES, ETC. BEING NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE, THE AO DISALLOWED THE CLAIMED EXPENSES U/S 37(1) OF THE ACT IN VIEW OF CLAUSE 39 OF ARTICLE OF ASSOCIATION OF THE COMPANY PROVIDED FOR REIMBURSEMENT OF EXPENDITURE I NCURRED BY THE ASSESSEE IN CONNECTION WITH ANY EXTRA SERVICES PROVIDED TO THE COMPANY (BIL TRADING PVT. LTD.). 4. THE LD. CIT(A) HAS HOWEVER ALLOWED THE CLAIME D EXPENSES TO THE EXTENT OF RS. 15,25,255/-. 5. IN SUPPORT OF THE GROUND, THE LD. DR HAS PLA CED RELIANCE ON THE ASSESSMENT ORDER WHEREAS THE LD. AR HAS TRIED TO JUSTIFY THE F IRST APPELLATE ORDER. 6. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND THA T THE AO HAS DECIDED THE ISSUE AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND SUMMONING THE DIRECTOR OF BIL TRADING LTD. THE AO H AS DOUBTED THE GENUINENESS OF THE CLAIMED EXPENSES IN VIEW OF CLAU SE 39 OF THE ARTICLE OF ASSOCIATION OF THE COMPANY PROVIDED FOR REIMBURSEME NT OF EXPENSES INCURRED BY THE ASSESSEE IN CONNECTION WITH ANY EXTRA SERVICES PROVIDED FOR THE COMPANY AS WELL AS THE PROVISIONS U/S 37(1) OF THE ACT. HE HAS ACCORDINGLY DISALLOWED THE WHOLE CLAIMED EXPENSES AMOUNTING TO RS. 18,23,265/- . THE LD. CIT(A) HAS HOWEVER ALLOWED THE CLAIMED EXPENSES TO THE EXTENT OF RS. 15,25,255/- WITHOUT PASSING A SPEAKING ORDER, SHOWING THE BASIS ON WHICH HE CAME TO THE CONCLUSION THAT THE ASSESSEE DESERVES THE RELIEF ON ACCOUNT OF THE CLAIMED ITA NO. 2746/DEL/2012 3 EXPENSES, GRANTED BY HIM. THE MATTER IS THUS SET AS IDE TO THE FILE OF THE LD. CIT(A) TO DECIDE THE ISSUE AFRESH AFTER PASSING A S PEAKING ORDER, FOR ARRIVING AT JUST AND PROPER CONCLUSION ON THE ISSUE. HE WILL AL SO AFFORD OPPORTUNITY OF BEING HEARD TO THE PARTIES. THE GROUND IS THUS ALLOWED FO R STATISTICAL PURPOSES. 7. IN THE RESULT APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH FEBRUARY, 2014. SD/- SD/- (SHAMIM YAHYA) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 7 TH FEBRUARY, 2014 *VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSISTANT REGISTRAR, ITAT