Appeal details
Counselvise Citation
[2014] 120 COUNSELVISE.COM (IT) 7471 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 6 month(s) 2 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
19-12-2014
Appeal Filed By
Department
Order Result
Allowed
Bench Allotted
A
Next Hearing Date
15-12-2014
Assessment Year
2007-2008
Appeal Filed On
16-06-2011
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A, NEW DELHI) BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.1660 /DEL/2010 ASSESSMENT YEAR : 2006-07 ANIL HARSH, VS. ACIT, CIRCLE 32(1), PROP. CHAMAN COLOUR CENTRE, NEW DELHI 1458, WAZIR NAGAR, KOTLA MUBARAKPUR, NEW DELHI. GIR / PAN:AADPH5247D I.T.A.NO. 3254/DEL/2011 (ASSESSMENT YEAR 2007-08) ACIT, CIRCLE 32(1), VS. ANIL HARSH, PROP. NEW DELHI CHAMAN COLOUR CENTRE, 1458, WAZIR NAGAR, KOTLA MUBARAKPUR, NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N. K. KARHAIL, ADV. RESPONDENT BY : SHRI Y KAKKAR, DR ORDER PER T.S. KAPOOR, AM: THESE ARE TWO APPEALS RELATING TO ASSESSMENT YEARS 2006-07 & 2007- 08. I.T.A. NO. 1660/DEL/2010 HAS BEEN FILED BY ASS ESSEE AGAINST THE ORDER OF LD. CIT(A) DATED 12.02.2010 WHEREAS I.T.A.NO. 3254 HAS BEEN FILED BY REVENUE AGAINST THE ORDER OF LD. CIT(A) DATED 20.04 .2011. IN ASSESSEES APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GRIEV ANCES: 2 ITA NO.1660/DEL/2010 I.T.A.NO. 3254/DEL/2011 I) CONFIRMATION OF DISALLOWANCE OF INSURANCE EXPENSES AMOUNTING TO RS.20,097/-. II) CONFIRMATION OF DISALLOWANCE OUT OF DEFERRED REVENU E EXPENSES AMOUNTING TO RS.3.64 LACS III) CONFIRMATION OF DISALLOWANCE OF RS.52,175/- OUT OF TELEPHONE EXPENSES. IV) 2. THE REVENUE ON THE OTHER HAND IS AGGRIEVED WITH THE ACTION OF LD. CIT(A) BY WHICH HE HAD DELETED THE FOLLOWING DISALL OWANCES:- I) GROUND NO.1 & 2 - BODY SHOP EXPENSES AMOUNTING T O RS.25,27,257/-: THE EXPENSES WERE DISALLOWED BY A.O. TREATING IT AS CAPITAL EXPENDITURE AND WHICH HAVE BEEN ALLOWED BY LD. CIT(A) HOLDING THE S AME TO BE REVENUE IN NATURE. II) GROUND NO.3 DEFERRED REVENUE EXPENDITURE :- THE REVENUE IS FURTHER AGGRIEVED WHEREBY LD. CIT(A) HAS DELETED ADDITION OF RS.5.60 LACS WHICH WAS MADE BY A.O. UNDER THE HE AD DEFERRED REVENUE EXPENDITURE. 2.1 GROUND NO.2 OF THE ASSESSEES APPEAL AND GROUND NO.3 OF REVENUES APPEAL ARE SIMILAR IN NATURE. THESE APPEALS WERE H EARD TOGETHER AND THEREFORE FOR THE SAKE OF CONVENIENCE A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN AUTHORIZED DISTRIBUTOR OF DUBANT PAINTS AND IS CARRYING ON ITS BUSINESS UNDER THE NAME AND STYLE M/S. CHAMAN COLOUR CENTRE. DURING ASSESS MENT YEAR 2006-07, THE A.O. MADE THE FOLLOWING DISALLOWANCES: I) INSURANCE EXPENSES RS.20,097/-: THE A.O. OBSERVED THAT THE ASSESSEE HAD DEBITED INSURANCE EXPENSES AMOUNTING T O RS.21,727/- WHICH 3 ITA NO.1660/DEL/2010 I.T.A.NO. 3254/DEL/2011 WERE MADE ON PURCHASE OF NEW CAR. THE A.O. HELD TH ESE EXPENSES TO BE OF CAPITAL NATURE AND ALLOWED DEPRECIATION @ 7.5% AMOU NTING TO RS.1,630/- AND DISALLOWED REMAINING AMOUNT OFRS.20,097/- AS CA PITAL EXPENDITURE. II) DEFERRED REVENUE EXPENDITURE OF RS.3.64 LACS : THE A.O. OBSERVED THAT THE ASSESSEE HAD CLAIMED AN AMOUNT OF RS.3.64 LACS AS DEFERRED REVENUE EXPENDITURE WRITTEN OFF AND THEREFORE, THE ASSESSEE WAS SHOW CAUSED TO FURNISH DETAILS OF THE SAME. IN REPLY, THE ASSESSE E SUBMITTED THAT THE EXPENSES WERE INCURRED WHOLLY AND EXCLUSIVELY FOR T HE PURPOSE OF BUSINESS, THEREFORE, WAS ALLOWED UNDER SECTION 37 OF THE ACT. THE A.O. WAS NOT SATISFIED AND VIDE ORDER SHEET ENTRY DATED 20.12.20 08, AGAIN DIRECTED THE ASSESSEE TO GIVE NOTE ON ADMISSIBILITY OF DEFERRED REVENUE EXPENDITURE TO WHICH ASSESSEE SUBMITTED AS UNDER: THAT REGARDING DEFERRED REVENUE EXPENDITURE WE AR E EXPLAINING THE CHAIN WHICH IS ON ACCOUNT OF BUSINESS PURPOSES. THE 'A' ISSUED INSTRUCTION TO PRECISION TESTING MACHINES PVT. LTD. TO INSTALL A MACHINE WITH THE END USER AT JAMMU & KASHMIR UNDER INSTRUCTION OF THE 'A'. THE ENTIRE EXPENDITURE OF RS. 15,00,000/- WERE INCURRED BY THE 'A '. IT WAS MUTUALLY AGREED THAT THE END USER WILL PURCHASE GOODS ONLY FROM GAURAV TRADERS OF PETHANKOT AND FROM NOBO DY AND SIMILARLY GAURAV TRAVERS WOULD PURCHASE CAR PAINTS FROM THE 'A ' . IN SHORT THE CHAIN INVOLVES FOUR PERSONS THAT IS M/S. PRECISION TESTING MACHINES PVT. LTD. WHO ARE MANUFACTURERS OF MACHINE . THE 'A M/S GAURAV TRADERS AND M/S GAM CASH ALL THE FOUR HAVE B ENEFITED. THE INVESTMENT BY THE 'AN ON THE MACHINE INSTALLED IN U DHAMPUR JAMMU & KASHMIR WAS FINANCED BY THE 'A '. IT WAS PURELY B USINESS CONSIDERATION AND ONLY 25% EXPENSES WERE CLAIMED'. THE A.O. WAS NOT SATISFIED WITH THE REPLY FILED BY ASSESSEE AND RELYING UPON A NUMBER OF CASE LAWS, DISALLOWED SUCH CLAIM OF DEF ERRED REVENUE EXPENDITURE. THE A.O. HELD THAT ONE OF THE CONDITI ONS FOR ALLOWING EXPENSES 4 ITA NO.1660/DEL/2010 I.T.A.NO. 3254/DEL/2011 U/S 37 OF THE ACT WAS THAT THE AMOUNT SHOULD RELATE TO CURRENT YEAR, WHICH WAS NOT THE CASE AND, THEREFORE, HE DISALLOWED THE SAME. III) OUT OF TELEPHONE EXPENSES :- THE A.O. OBSERVED THAT THE ASSESSEE HAD INCURRED THE EXPENDITURE OF RS.5,21,751/- ON AC COUNT OF TELEPHONE EXPENSES, THEREFORE ASSESSEE W AS ASKED TO FILE COM PLETE DETAILS OF TELEPHONE EXPENSES. THE ASSESSEE COULD NOT FILE COMPLETE DET AILS, THEREFORE, HE DISALLOWED 1/10 TH OF SUCH EXPENSES. 4. IN ASSESSMENT YEAR 2007-08, THE A.O. DISALLOWED THE FOLLOWING AMOUNTS: I) CLAIM OF EXPENSES UNDER THE HEAD BODY SHOP EXPEN SES : THE A.O. OBSERVED THAT THE ASSESSEE HAD CLAIMED EXP ENSES AMOUNTING TO RS.29,73,244/- UNDER THE HEAD BODY SHOP EXPENSES AN D THEREFORE, THE ASSESSEE WAS SHOW CAUSED TO FURNISH NOTE THEREON. IN REPLY, THE ASSESSEE SUBMITTED THAT THE EXPENSES ARE RELATED TO INSTALLA TION OF BODY SHOP EQUIPMENT AT THE PREMISES OF FX HUNDAI AND M/S. BHA GAT GROUP. IT WAS SUBMITTED THAT THE SAID BODY SHOP EQUIPMENTS WERE I NSTALLED AT THESE PREMISES IN VIEW OF THE AGREEMENTS ENTERED WITH THE SE PARTIES. IT WAS SUBMITTED THAT THE EXPENDITURE ON THESE EQUIPMENTS WERE INCURRED BY ASSESSEE ON THE EXPRESS UNDERSTANDING THAT THEY WIL L MAKE SIZEABLE PURCHASES FROM THE ASSESSEE AND THEREFORE, THE EXPENSES WERE FOR THE PURPOSE OF BUSINESS OF ASSESSEE. THE A.O. AFTER GOING THROUGH THE AGREEMENTS WITH THESE COMPANIES HELD THAT THE EXPENDITURE CLAIMED B Y ASSESSEE WAS NOT A REVENUE EXPENDITURE AND, THEREFORE, HE DISALLOWED T HE SAME. HOWEVER, HE ALLOWED DEPRECIATION @ 15% AND THEREFORE, THE NET A DDITION WAS OF RS.25,27,257/-. 5 ITA NO.1660/DEL/2010 I.T.A.NO. 3254/DEL/2011 II) ADDITION ON ACCOUNT OF DEFERRED REVENUE EXPENDI TURE : THE A.O. OBSERVED THAT THE ASSESSEE HAD CLAIMED AN AMOUNT OF RS.5.60 LACS ON ACCOUNT OF DEFERRED REVENUE EXPENSES. ON QUERY, THE ASSESS EE FURNISHED DETAILS ABOUT THE DEFERRED REVENUE EXPENDITURE. HOWEVER THE A.O. RELIED UPON A NUMBER OF CASE LAWS AND HELD THAT THERE WAS NO CONCEPT OF DEFERRED REVENUE EXPENDITURE UNDER THE INCOME TAX ACT AND, THEREFORE , HE DISALLOWED THE SAME. THE ASSESSEE TOOK THE MATTER BEFORE LD. CIT( A) AND MADE VARIOUS SUBMISSIONS. LD. CIT(A) IN ASSESSMENT YEAR 2006-07 UPHELD THE DISALLOWANCE MADE BY A.O. WHEREAS IN ASSESSMENT YEA R 2007-08, LD. CIT(A) ALLOWED RELIEF TO THE ASSESSEE ON ACCOUNT OF BODY SHOP EXPENSES AND ON ACCOUNT OF DEFERRED REVENUE EXPENDITURE. AGGR IEVED, BOTH THE PARTIES ARE IN APPEAL BEFORE US. 5. AT THE OUTSET, LD. A.R. ARGUING ON ITS APPEAL, S UBMITTED THAT THE A.O. HAS WRONGLY UPHELD THE ADDITION ON ACCOUNT OF INSUR ANCE EXPENSES AND CLAIMED THAT INSURANCE EXPENSE WERE NOT BORNE BY AS SESSEE AND, THEREFORE, ITS CLAIM AS EXPENDITURE DID NOT ARISE AT ALL. 5.1 LD. D.R. ON THE OTHER HAND RELIED UPON THE ORDERS O F AUTHORITIES BELOW. 5.2 ARGUING UPON 2 ND GROUND IN ASSESSMENT YEAR 2006-07, LD. A.R. SUBMITTED THAT OUT OF TOTAL CLAIM OF RS.3.64 LACS, EXPENDITURE OF RS.3 LACS WAS INCURRED IN THE YEAR ITSELF. IT WAS SUBMITTED THAT THE ASSESSEE HAD INCURRED AN EXPENDITURE OF RS.14.56 LACS FOR INSTAL LATION OF BODY SHOP EQUIPMENTS IN THE PREMISES OF ITS DEALERS M/S. GAUR AV TRADERS IN PATHANKOT. IT WAS SUBMITTED THAT OUT OF RS.14.56 LACS, RS.11.5 6 LACS WAS SPENT IN EARLIER YEAR AND RS.3 LACS WERE SPENT IN THE PRESENT YEAR M AKING TOTAL EXPENSES OF RS.14.56 LACS OUT OF WHICH ASSESSEE HAD CLAIMED OF RS.3.64 LACS WHICH WAS 6 ITA NO.1660/DEL/2010 I.T.A.NO. 3254/DEL/2011 EQUIVALENT TO 25% OF TOTAL EXPENDITURE. SINCE THE BENEFIT WAS TO FLOW IN THE SUCCEEDING YEARS, THEREFORE, THE ASSESSEE HAD CLAIM ED ONLY 25% OF THE TOTAL EXPENDITURE AS DEFERRED REVENUE EXPENDITURE. WITHO UT PREJUDICE, IT WAS SUBMITTED THAT OUT OF RS.14.56 LACS, RS.3 LACS WERE SPENT IN THE YEAR ITSELF. THEREFORE, AT LEAST RS.3 LACS HAS TO BE CONSIDERED AS EXPENDITURE U/S 37(1) OF THE ACT. 5.3 LD. D.R. ON THE OTHER HAND SUBMITTED THAT INSTA LLATION OF BODY SHOP EQUIPMENT WAS CAPITAL EXPENDITURE WHETHER INSTALLED AT THE PREMISES OF ASSESSEE OR AT THE PREMISES OF SOME OTHER PERSON AN D IT CAN NEVER PARTAKE THE FORM OF REVENUE EXPENDITURE. SHE FURTHER SUBMITT ED THAT OUT OF RS.14.56 LACS, RS.11.56 LACS WERE SPENT IN EARLIER YEARS AND WAS NOT ALLOWABLE DURING CURRENT YEAR. FURTHER, IT WAS SUBMITTED THAT THE CLAIM OF THE ASSESSEE THAT RS.3 LACS WAS SPENT IN THE YEAR ITSELF IS ALSO NOT TENABLE AS THE EXPENSES WERE TOWARDS CREATION OF CAPITAL ASSET AND THEREFORE, WA S NOT ALLOWABLE. 5.4 ARGUING UPON 3 RD GROUND OF APPEAL, LD. A.R. SUBMITTED THAT DISALLOWANCE OF 10% OUT OF TELEPHONE EXPENDITURE IS ARBITRARY AND WAS NOT WARRANTED WHEREAS LD. D.R. SUBMITTED THAT ELEMENT O F PERSONAL USE CANNOT BE DENIED OUT OF TELEPHONE EXPENDITURE. 6. ARGUING UPON REVENUES APPEAL IN ASSESSMENT YEAR 2007-08, LD. D.R. SUBMITTED THAT THE BODY SHOP EXPENDITURE CLAIM ED BY ASSESSEE WERE WRONGLY DELETED BY LD. CIT(A) HOLDING THESE TO BE R EVENUE IN NATURE WHEREAS, THESE ARE CLEARLY CAPITAL IN NATURE AND TH E EXPENDITURE WERE INCURRED FOR CREATION OF CAPITAL ASSET AND BENEFIT OF WHICH WAS TO FLOW IN SUCCEEDING YEARS AND, THEREFORE, A.O. HAD RIGHTLY A LLOWED DEPRECIATION @ 15%. 7 ITA NO.1660/DEL/2010 I.T.A.NO. 3254/DEL/2011 6.1 AS REGARDS 2 ND GROUND OF APPEAL, LD. D.R. SUBMITTED THAT THERE IS NO CONCEPT OF DEFERRED REVENUE EXPENDITURE UNDER THE I NCOME TAX ACT THEREFORE, LD CIT(A) HAD WRONGLY ALLOWED DEFERRED REVENUE EXPE NDITURE OF RS.5.60 LACS. IT WAS FURTHER SUBMITTED THAT NATURE OF THES E EXPENSES WAS NEVER DISCUSSED BY LD. CIT(A) AND HE HAD ALLOWED RELIEF H OLDING THAT THE ASSESSEE HAD INCURRED EXPENDITURE EXCEEDING RS.5.60 LACS IN THE YEAR ITSELF AND WAS THEREFORE ELIGIBLE FOR ALLOWANCE OF SAID EXPENSES. 6.2 LD. D.R. SUBMITTED THAT THESE EXPENSES WERE ALS O ON ACCOUNT OF INVESTMENT MADE BY ASSESSEE IN CREATION OF CAPITAL ASSET IN THE SHAPE OF BODY SHOP EQUIPMENT AT VARIOUS PLACES, THEREFORE, THE SA ME NEED TO BE CAPITALIZED AND DEPRECIATION CAN BE ALLOWED ACCORDINGLY. LD. A .R. REPLYING TO THE 1 ST GROUND OF APPEAL SUBMITTED THAT BODY SHOP EXPENSES WERE INCURRED BY ASSESSEE TO PROMOTE THE BUSINESS OF THE ASSESSEE WH ICH WAS IN ACCORDANCE WITH THE AGREEMENTS ENTERED INTO BY ASSESSEE WITH D EPANT PAINT INDIA LTD. AND IN THIS RESPECT, OUR ATTENTION WAS INVITED TO P APER BOOK PAGES 1-16 WHERE A COPY OF DISTRIBUTORS AGREEMENT WAS PLACED. LD. A .R. FURTHER SUBMITTED THAT IN VIEW OF THIS AGREEMENT, THE ASSESSEE HAD ENTERED INTO FURTHER AGREEMENT WITH OTHER DEALERS FOR INSTALLATION OF BODY SHOP EQ UIPMENT MACHINES AND THEREFORE, IT WAS NECESSARY BUSINESS EXPENDITURE AS THE DEALERS HAD COMMITTED A SPECIFIC TURNOVER IN VIEW OF INSTALLATI ON OF SUCH EQUIPMENT AND IN THIS RESPECT, OUR ATTENTION WAS INVITED TO COPY OF AGREEMENTS PLACED AT PAPER BOOK PAGES 17-18 AND 23-27. 7. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H THE MATERIAL PLACED ON RECORD. FIRST, WE TAKE UP THE APPEAL IN I.T. A. NO. 1660/DEL/2010. REGARDING 1 ST GROUND IN RESPECT OF INSURANCE EXPENSES, LD. A.R. SUBMITTED 8 ITA NO.1660/DEL/2010 I.T.A.NO. 3254/DEL/2011 THAT NO SUCH CLAIM OF INSURANCE EXPENSES WERE MADE IN THE P & L ACCOUNT THEREFORE THE DISALLOWANCE WAS NOT WARRANTED. THIS FACT IS NOT COMING OUT FROM THE FACT AS MENTIONED IN ASSESSMENT ORDER AND LD. CIT(A)S ORDER THEREFORE, WE DEEM IT APPROPRIATE TO SET ASIDE THIS ISSUE TO A.O. FOR RE- ADJUDICATION. 7.1 IN RESPECT OF THE 2 ND ISSUE OF DEFERRED REVENUE EXPENDITURE, WE FIND THAT THE AMOUNT CLAIMED BY ASSESSEE REPRESENT ONLY 25% OF TOTAL EXPENSES OF RS.14.56 LACS WHICH WERE SPENT BY ASSESSEE FOR INST ALLATION OF BODY SHOP EQUIPMENTS IN THE PREMISES OF M/S. GAURAV TRADERS A ND OUT OF THIS RS.11.56 LACS WERE SPENT IN THE EARLIER YEAR AND RS.3 LACS W ERE SPENT IN THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAD CLASSIFIED THE TO TAL EXPENSES OF RS.14.56 LACS AS DEFERRED REVENUE EXPENSES AND HAD CLAIMED 2 5% IN THE PRESENT YEAR. WE FIND THAT THERE IS NO CONCEPT OF DEFERRED REVENU E EXPENDITURE IN THE INCOME TAX ACT AND THE EXPENDITURE HAS TO BE EITHER REVENUE IN NATURE OR CAPITAL IN NATURE. THE EXPENSES INCURRED BY ASSESS EE ARE IN FACT BODY SHOP EQUIPMENTS ONLY AS THE AMOUNT WAS SPENT FOR INSTALL ATION OF SUCH EQUIPMENT AT THE PREMISES OF ONE OF ITS DEALERS: M/S. GAURAV TRADERS WHERE COPY OF AGREEMENT WITH M/S. GAURAV TRADES PLACED AT PAPER B OOK PAGES 11-12 DOES NOT TAKE ABOUT SUCH INVESTMENT. THE ASSESSEE HAS D EBITED THE AMOUNT OF RS.14.56 LACS TO THE ACCOUNT OF PRECISION TESTING M ACHINES (P) LTD. OUT OF RS.3.64 LACS HAS BEEN CLAIMED AS DEFERRED REVENUE E XPENDITURE. THEREFORE, FACTS ABOUT THESE EXPENSES ARE NOT CLEAR AND FURTHE R IT IS NOT CLEAR WHETHER PRECISION TESTING MACHINES SUPPLIED CERTAIN EQUIPME NTS AND WHETHER THEY WERE INSTALLED OR NOT. THEREFORE, WE SET ASIDE THI S ISSUE TO THE OFFICE OF A.O. FOR RE-ADJUDICATION TO DETERMINE THE NATURE OF SUCH ENTRIES AND TO DETERMINE 9 ITA NO.1660/DEL/2010 I.T.A.NO. 3254/DEL/2011 WHETHER SAME EQUIPMENTS WERE SUPPLIED AND INSTALLED BY SUPPLIER. THE A.O. WILL DECIDE THE ISSUE AFTER ANALYZING COMPLETE FACT S AND CIRCUMSTANCES INCLUDING THE OWNERSHIP OF SUCH ASSETS. NEEDLESS T O SAY, THE ASSESSEE WILL BE PROVIDED SUFFICIENT OPPORTUNITY OF BEING HEARD. 7.2 AS REGARDS THE 3 RD ISSUE REGARDING CONFIRMATION OF DISALLOWANCE OF TELEPHONE EXPENSES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A), THEREFORE, WE CONFIRM THE SAME AND GROUND NO.3 IS D ISMISSED. 7.3 IN VIEW OF ABOVE, I.T.A. NO. 1660/DEL/2010 IS P ARTLY ALLOWED FOR STATISTICAL PURPOSES. 8. NOW, COMING TO I.T.A. NO. 3254/DEL/2011: THE FI RST ISSUE IS REGARDING CONFIRMATION OF DISALLOWANCE OF BODY SHOP EXPENSES WHICH THE ASSESSEE HAD CLAIMED AS REVENUE EXPENSES AND LD. CI T(A) ALSO HELD THESE TO BE REVENUE EXPENSES, WHEREAS WE FIND THAT THE SAID EXPENSES WERE INCURRED BY ASSESSEE FOR INSTALLATION OF VARIOUS BODY SHOP E QUIPMENTS. WE FURTHER FIND THAT BENEFIT OF INSTALLATION OF SUCH BODY SHOP EQUIPMENT WAS TO RUN FOR 5 YEARS AS IS APPARENT FROM TERMS OF AGREEMENT ENTERE D INTO BY ASSESSEE WITH ITS DEALERS. WE ALSO NOTE FROM THE AGREEMENT WITH BHAGAT GROUP THAT ASSESSEE WOULD REMAIN OWNER OF BODY SHOP EQUIPMENT AS IS APPARENT FROM CLAUSE 7 PLACED AT PAPER BOOK PAGE 30. WE ALSO NOT E THAT BENEFIT FOR INSTILLATION OF EQUIPMENTS IS OF ENDURING IN NATURE WHICH WILL BE AVAILABLE IN SUCCEEDING YEARS. MOREOVER, CLAUSE 12.3 OF AGREEME NT PLACED AT PAPER BOOK PAGE 25 MENTIONS THAT IN THE EVENT OF EARLY TERMINA TION OF AGREEMENT, THE PRO RATA INVESTMENT WILL BE RETURNED BACK TO ASSESSEE. THEREFORE, THE EXPENDITURE CLAIMED BY ASSESSEE CANNOT BE SAID TO BE OF REVENUE IN NATURE. THEREFORE, THIS ISSUE IS ALSO SET ASIDE TO THE OFFICE OF A.O. WHO AFTER CONSIDERING ALL 10 ITA NO.1660/DEL/2010 I.T.A.NO. 3254/DEL/2011 TERMS AND CONDITIONS OF AGREEMENTS AND AFTER CONSID ERING THE OWNERSHIP OF ASSETS INSTALLED BY ASSESSEE, WILL ARRIVE AT THE AP PROPRIATE DECISION. 8.1 AS REGARDS GROUND NO.3, WE FIND THAT THIS ISSUE IS REGARDING CLAIM OF DEFERRED REVENUE EXPENDITURE. THE ASSESSEE HAD CLA IMED DEFERRED REVENUE EXPENDITURE OF RS.5.60 LACS OUT OF TOTAL EXPENDITUR E OF RS.23.32 LACS. THE SAID EXPENDITURE CONSISTED OF THE FOLLOWING AMOUNTS AS STANDING IN THE ACCOUNTS OF FOLLOWING PARTIES: OPENING BALANCE RS.2.42 LACS REF. P.B. PAGE 35 OUT OF ACCOUNT OF HANS RS.2.00 LACS 36 OUT OF ACCOUNT OF REGENT AUTOMOBILES RS.0.20 LACS 37 OUT OF ACCOUNT OF RAJA PAINT RS.1.00 LAC 38 TOTAL RS.5.60 LACS 8.2 WE FURTHER FIND THAT A PART OF DEFERRED REVENUE EXPENDITURE ALLOWED DURING THE YEAR IS COMING OUT FROM THE PREVIOUS YEA R IN WHICH YEAR LD. CIT(A) HAS NOT ALLOWED THE SAME. WE FURTHER FIND T HE GENUINENESS AND NATURE OF THESE EXPENSES HAS NOT BEEN VERIFIED BY E ITHER A.O. OR LD. CIT(A). MOREOVER, WE HAVE ALREADY DECIDED SIMILAR ISSUE IN ASSESSEES APPEAL WHICH HAS BEEN SET ASIDE TO THE OFFICE OF A.O. FOR RE-ADJ UDICATION. THEREFORE, FOLLOWING THE SAME, THIS ISSUE IS ALSO REMITTED BAC K TO THE OFFICE OF A.O. 9. IN VIEW OF ABOVE, I.T.A. NO. 3254/DEL/2011 IS AL LOWED FOR STATISTICAL PURPOSES. 10. IN NUTSHELL, APPEAL OF THE ASSESSEE IS PARTLY A LLOWED FOR STATISTICAL PURPOSES AND THAT OF REVENUE IS ALLOWED FOR STATIST ICAL PURPOSES. 11. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH DEC., 2014. SD./- SD./- (I. C. SUDHIR ) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 19.12. 2014 11 ITA NO.1660/DEL/2010 I.T.A.NO. 3254/DEL/2011 SP COPY FORWARDED TO:- THE APPELLANT THE RESPONDENT THE CIT THE CIT (A)-, NEW DELHI. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER
