ITO, New Delhi V. GD Infrabuild Private Ltd., New Delhi

ITA 3630/DEL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4982 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 06-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: HARISH KAPOOR
• Keywords: Additional evidence; Onus to prove; Revenue expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI C BEN CH, NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER. ITA NO. 3630/DEL/2013 [A.Y. 2009-10] THE INCOME-TAX OFFICER VS. G.D. INFRABUILD PVT. LTD WARD 12(1) 39B, 1 ST FLOOR, STREET NO. 3 NEW DELHI PRASAD NAGAR, NEW DELHI PAN : AACCG 7164 J [APPELLANT] [RESPONDENT] DATE OF HEARING : 23.08.2017 DATE OF PRONOUNCEMENT : 28.08.2017 ASSESSEE BY : SHRI HARISH KAPO OR, CA REVENUE BY : SHRI ARUN KUMAR YADAV, SR.DR ORDER PER B.P. JAIN, ACCOUNTANT MEMBER: THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER OF THE LD. CIT(A)- XV, NEW DELHI VIDE ORDER DATED 11.03.2013 F OR ASSESSMENT YEAR 2009-10. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ORDER OF THE LD.CIT(A) IS WRONG AND AGAINST THE PROVISIONS OF LAW WHICH IS LIABLE TO BE SET ASIDE. - 2- ITA NO. 3630/DEL/2013 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.2,28.84,14 5/- MADE BY THE AO BY DISALLOWING THE PORTION OF INTEREST PA ID TO BANK BY THE ASSESSEE. THIS ADDITION WAS MADE BY THE AO B Y HOLDING THAT ASSESSEE COMPANY WAS PAYING HIGHER RATE OF INT EREST TO BANKS AND ON OTHER HAND CHARGING LESSER RATE OF INTEREST/INTEREST FREE LOANS. THE ADDITION HAS BEEN DELETED BY THE LD.CIT(A) BY STATING THE AO CANNOT SIT IN TH E SHOES OF THE AMOUNT ADDED BY THE AO REPRESENTS THE AMOUNT OF PART OF TOTAL INTEREST PAID TO BANKS AND DEBITED TO THE PROFIT & LOSS ACCOUNT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.2, 60,68,000/- MADE BY THE AO ON ACCOUNT OF UNACCOUNTED ACCRUED IN TEREST. THIS ADDITION HAS BEEN DELETED BY THE AO LD.CIT(A) BY COMPLETELY DISREGARDING THE FINDING GIVEN BY THE AO THAT ENTRIES RELATING TO PAYMENT OF INTEREST BY DOMUS HO LDINGS PRIVATE LIMITED TO THE ASSESSEE COMPANY ARE CLEARLY REFLECTED IN THE CONFIRMED COPY OF ACCOUNT OF DOMUS HOLDING P RIVATE LIMITED SUBMITTED BY THE ASSESSEE COMPANY IN THE CO URSE OF ASSESSMENT PROCEEDINGS. 4. ON THEFACTS AND CIRCUMSTANCES OF THE CASE THE L D.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.28,478/- M ADE BY THE AO ON ACCOUNT OF INTEREST PAID ON LATE DEPOSIT OF T DS. THE ADDITION HAS BEEN DELETED BY THE LD.CIT(A)BY HOLDIN G THAT THE AMOUNT HAS ALREADY BEEN ADDED BACK BY THE ASSES SEE IN - 3- ITA NO. 3630/DEL/2013 ITS COMPUTATION OF TAXABLE INCOME THEREBY COMPLETEL Y DISREGARDING THE FACT NO SUCH AMOUNT IS REFLECTED I N THE COMPUTATION OF TAXABLE INCOME FURNISHED BY THE ASSE SSEE COMPANY. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF R S.74,850/- MADE BY THE AO ON ACCOUNT OF FEE PAID TO ROC FOR IN CREASE IN CAPITAL STRUCTURE IN VIEW OF THE DECISION OF HONBL E SUPREME COURT REPORTED IN 225 ITR 798 (BROOKE BOND INDIA LI MITED VS CIT).THE ADDITION HAS BEEN DELETED BY THE LD.CIT(A) BY HOLDING THAT THE AMOUNT HAS ALREADY BEEN ADDED BACK BY THE ASSESSEE IN ITS COMPUTATION OF TAXABLE INCOME THERE BY COMPLETELY DISREGARDING THE FACT NO SUCH AMOUNT IS REFLECTED IN THE COMPUTATION OF TAXABLE INCOME FURNISHED BY T HE ASSESSEE COMPANY. 6. THE APPELLANT CRAVES TO ADD, ALTER, AMEND, MODI FY, ADD OR FOREGO ANY GROUND OF APPEAL AT ANY TIME BEFORE OR D URING THE HEARING OF THIS APPEAL. 3. GROUND NOS. 1 AND 6 ARE GENERAL IN NATURE AND HE NCE DO NOT NEED ANY ADJUDICATION AT OUR END. - 4- ITA NO. 3630/DEL/2013 4. BRIEF FACTS OF GROUND NO 2, AS EMANATING FROM TH E ORDER OF THE ASSESSING OFFICER ARE THAT DURING THE YEAR UNDER CO NSIDERATION ASSESSEE COMPANY HAD PAID AN AMOUNT OF RS.5,64,86,911/- AS I NTEREST TO BANK. THIS INTEREST IS PAID ON THE FUNDS BORROWED FROM TH E BANKS. IT IS NOTEWORTHY THAT OUT OF THE TOTAL INTEREST PAID TO B ANKS, AN AMOUNT OF RS.,336,45,454/- HAS VOLUNTARILY BEEN ADDED BY THE ASSESSEE COMPANY IN THE COMPUTATION OF TAXABLE INCOME. AS ON 31.03. 2009, AN AMOUNT OF R$.62,20,82,326/- IS SHOWN AS PAYABLE TO THE BANK. PERUSAL OF THE ACCOUNTS AS WELL AS DETAILS FURNISHED REVEALED THAT DURING THE YEAR ASSESSEE COMPANY HAS GIVEN THE INTEREST BEARINGS FU NDS TO FEW PARTIES AS INTEREST FREE ADVANCES. MEANING THEREBY, ON THE ONE HAND ASSESSEE COMPANY IS PAYING INTEREST ON THE FUNDS BORROWED BY IT AND SIMULTANEOUSLY SUCH INTEREST BEARING FUNDS HAVE GIV EN AS INTEREST FREE ADVANCES. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE A R WAS CONFRONTED ON THIS ISSUE. IN RESPONSE TO THIS QUERY , IT WAS SUBMITTED THAT ASSESSEE COMPANY HAD VOLUNTARILY ADDED AN AMOU NT OF RS3,36,45,454/- OUT OF THE TOTAL INTEREST PAID TO T HE BANK. THE ABOVE REPLY WAS CONSIDERED, BUT NOT FOUND TENABLE BY THE ASSESSING OFFICER. AS PER DETAILS FURNISHED, AN AMOUNT OF RS.46,86,41. 862/- HAS BEEN GIVEN AS INTEREST FREE ADVANCE DURING THE YEAR. COS T OF INTEREST ON - 5- ITA NO. 3630/DEL/2013 THESE FUNDS @ 10.9% {INTEREST RATE CHARGED BY THE B ANK} COMES TO RS.5,10,81,973/-. 5. AS REGARDS THE LOANS ON WHICH INTEREST IS BEING CHARGED, AN AMOUNT OF RS.2,28,69,935/- HAS BEEN CHARGED FROM M/ S ROSY BLUE INDIA PRIVATE LIMITED. PERUSAL OF THE RECORDS REVEA LED THAT INTEREST @ 8% HAS BEEN CHARGED FROM THIS PARTY. AND ON THE CON TRARY, INTEREST @ 10.9% WAS PAID TO THE BANKS, WHICH WAS FOUND TO BE NOT PERMISSIBLE. INTEREST SHOULD HAVE BEEN CHARGED AT A HIGHER RATE THAN THE RATE OF INTEREST ON WHICH SUCH FUNDS ARE BORROWED, THEN ONLY INCOME WOULD ARISE. THIS HAS NOT BEEN DONE BY THE ASSESSEE COMPANY. IN VIEW OF THE ABOVE DISCUSSION, INTEREST PAID TO BANK WAS DISALLO WED IN TOTO. OUT OF THIS AN AMOUNT OF RS.3,36,45,454/- HAS ALREADY BEEN ADDED BACK. ACCORDINGLY, THE REMAINING INTEREST AMOUNTING TO RS .2,28,84,145/-, PAID TO BANK, WAS FURTHER DISALLOWED AND ADDED TO T HE TAXABLE INCOME. 6. WHEN THE AGGRIEVED ASSESSEE WENT IN APPEAL BEFOR E THE LD. CIT(A), THE ADDITION WAS DELETED BY OBSERVING AS U NDER: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE IN THE LIGHT OF THE DETAILED EXPLANATION MADE BY THE APPELLANT AND THE APPLICABLE LAW IN THIS REGARD. I FIND THAT THE APPELLANT COMPANY H AD SHOWN INTEREST INCOME OF RS.2,28,69,935/- IN RESPECT OF I NTEREST BEARING - 6- ITA NO. 3630/DEL/2013 LOANS GIVEN TO M/S. ROSY BLUE PVT. LTD. @ 8%. WHILE THE APPELLANT HAD INCURRED INTEREST EXPENSES OF RS.5,65,29,785/- IN P&L ACCOUNT WHICH WAS IN RESPECT OF BORROWING MADE FROM THE BAN K. THE APPELLANT CLAIMS THAT IT HAD AVAILED OVERDRAFT FROM M/S. LAKSHMI VILAS BANK FROM WHICH INTEREST @ 6.6% WAS C HARGED. THE AO WAS OF THE VIEW, THE INTEREST CHARGED BY THE APP ELLANT WAS 10.9%. I FIND THAT OTHER THAN THIS, THE APPELLANT H AD ADVANCED LOANS TO ITS HOLDING COMPANY M/S. DOMUS HOLDING PVT. LTD. ON WHICH NO INTEREST WAS CHARGED. EVENTUALLY, IN THE COMPUTA TION OF INCOME, THE APPELLANT HAD DISALLOWED THE ENTIRE AMO UNT OF BALANCE INTEREST EXPENDITURE AFTER CLAIMING THE AMOUNT OF I NTEREST EXPENDITURE EQUAL TO THE AMOUNT OF INTEREST INCOME IT RECEIVED FROM THE LOAN GIVEN TO M/S. ROSY BLUE PVT. LTD. 6.2 IT IS A WELL SETTLED LAW THAT THE AO CANNOT SIT IN THE SHOES OF THE BUSINESSMAN AND QUESTION THE PRUDENCE OF HIS DE CISIONS, AS SUBSTANTIATED BY SEVERAL CASE LAWS CITED BY THE APP ELLANT. THEREFORE, THE OBSERVATION OF THE AO THAT 'THIS IS NOT PERMISSIBLE AND THAT INTEREST SHOULD HAVE BEEN CHARGED AT A HIG HER RATE THAN THE RATE OF INTEREST ON WHICH FUNDS WERE BORROWED, IS ARBITRARY ' AND UNJUSTIFIED. MOREOVER, THE FACT IS THAT THE APP ELLANT HAD ALREADY DISALLOWED THE ENTIRE AMOUNT OF BALANCE INT EREST EXPENDITURE AFTER CLAIMING THE INTEREST EXPENDITURE EQUIVALENT TO THE INTEREST ON THE LOAN ADVANCED BY IT TO M/S ROSY BLUE. THEREFORE, THE ACTION OF THE AO IN THIS REGARD WAS UNJUSTIFIED AND ACCORDINGLY, THE ADDITION OF RS. 2,28,84,145/- IS D ELETED. - 7- ITA NO. 3630/DEL/2013 7. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE A.O AND THE LD. CIT(A) AN D THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. IT IS AN UNDISPUT ED FACT THAT THE ASSESSEE COMPANY HAS PAID AN AMOUNT OF RS. 5,64,86, 901/- AS INTEREST TO THE BANK ON THE FUNDS BORROWED. THE COST OF INT EREST ON THESE FUNDS IS 10.9% AS CHARGED BY THE BANK IS NOT DISPUT ED BY BOTH THE PARTIES. ON THE OTHER HAND, THE ASSESSEE HAD GIVEN LOAN TO M/S ROSY BLUE INDIA PVT. LTD @ 8%. NO BUSINESS EXPEDIENCY W AS BROUGHT ON RECORD BEFORE THE ASSESSING OFFICER OR THE LD. CIT( A) OR EVEN BEFORE US. IT WAS ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE T HAT THE LESS RATE OF INTEREST HAS BEEN CHARGED AS BUSINESS DECISION. TH E LD. COUNSEL FOR THE ASSESSEE COULD NOT CONTROVERT THE FINDING OF THE AS SESSING OFFICER OF REASONS FOR CHARGING RATE OF INTEREST @ 8% WHEN THE COST OF FUNDS BORNE BY THE ASSESSEE ARE @ 10.9%. THEREFORE, THE DIFFER ENCE HAS TO BE ADDED BACK. IT IS ALSO NOT UNDER DISPUTE THAT THE ASSESSEE HAS ADDED BACK VOLUNTARILY AN AMOUNT OF RS. 3,36,45,454/- AND THE ASSESSING OFFICER HAS GIVEN CREDIT FOR THE SAME AND THE BALAN CE AMOUNT OF RS. 2,28,84,145/- HAS RIGHTLY BEEN ADDED BACK. - 8- ITA NO. 3630/DEL/2013 8. AS REGARDS THE FINDING OF THE LD. CIT(A) THAT T HE ASSESSEE HAS AVAILED OVER DRAFT FROM LAXMI VILAS BANK FORM WHICH INTEREST @ 6.6% HAS BEEN CHARGED. AS PER PARA 5.4 OF THE LD. CIT(A) , THE LD. COUNSEL FOR THE ASSESSEE HAD SUBMITTED THAT RS. 30 LAKHS ONLY W ERE MADE OUT OF OVER DRAFT AVAILED FROM LAXMI VILAS BANK, BRANCH FO RT, MUMBAI AND COST OF FUND WAS 6.6%. THE COST OF THE FUNDS ON TH E OVER DRAFT COMES TO RS. 2 LAKHS PER ANNUM WHEREAS THE LD. CIT(A) HAS APPLIED THIS SAID RATE OF INTEREST PAID OF 5.64 CRORES AND HAS GIVEN FINDING IN PARA 6 OF HIS ORDER THAT THE ASSESSEE HAS PAID LESSER INTERES T ON THE LOANS SO RAISED. NO BUSINESS EXPEDIENCY HAS BEEN BROUGHT ON RECORD. IN FACT, THE LD. CIT(A) ACCEPTED THE PLEADING OF THE ASSESSE E AND HAS NOT BROUGHT ANY MATERIAL TO EVEN SUBSTANTIATE THE OVERD RAFT FROM LAXMI VILAS BANK WHICH HAS NOT EVEN BEEN CONTROVERTED TO THE ASSESSING OFFICER. THE FINDING OF THE LD. CIT(A) THAT THE AS SESSING OFFICER CANNOT SIT IN THE SHOES OF A BUSINESS MAN CANNOT BE APPLIE D IN THE CIRCUMSTANCES OF THE PRESENT CASE AND, THEREFORE, U NLESS BUSINESS EXPEDIENCY IS BROUGHT ON RECORD, WHICH HAS NOT BEEN DONE BY THE LD. CIT(A) OR BY THE LD. COUNSEL FOR THE ASSESSEE, WE F IND NO INFIRMITY IN THE ORDER OF THE ASSESSING OFFICER WHO HAS RIGHTLY ADDED THE AMOUNT OF RS. 2,28,84,145/- AS DISCUSSED HEREINABOVE AND THE ORDER OF THE LD. - 9- ITA NO. 3630/DEL/2013 CIT(A) IS REVERSED ON THIS ISSUE. ACCORDINGLY, GRO UND NO. 2 OF THE REVENUE IS ALLOWED. 9. AS REGARDS GROUND NO. 3, THE BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS COPY OF ACCOUNT OF M/S DOMUS HOLDINGS PRIVATE LIMITED WAS CALLED FOR. ASSE SSEE COMPANY HAD GIVEN FUNDS TO THIS COMPANY. IT WAS SEEN FROM THE C OPY OF ACCOUNT SO PROVIDED THAT DURING THE YEAR THIS COMPANY HAS PAID INTEREST TO THE TUNE OF RS.2,60,68,000/- TO, THE ASSESSEE COMPANY. HOWEVER, NO CORRESPONDING INCOME HAS BEEN ACCOUNTED FOR IN ITS BOOKS OF ACCOUNT BY THE ASSESSEE. THE AR WAS CONFRONTED ON THIS ISSU E, TO WHICH IT WAS STATED THAT NO INTEREST WAS PAID BY DOMUS HOLDINGS PRIVATE LIMITED TO THE ASSESSEE COMPANY. THE ASSESSEE HAS GIVEN ADVANC E TO THIS COMPANY BY TAKING LOANS FROM THE BANKS. WHENEVER REQUIRED, FUNDS WERE CALLED BACK TO REPAY THE BANK. NO INTEREST INCOME WAS EARN ED BY THE COMPANY. THE ABOVE REPLY OF THE ASSESSEE COMPANY HA S BEEN CONSIDERED BUT NOT FOUND TENABLE. THE COPY OF ACCOU NT FURNISHED IS DULY CONFIRMED BY THE COMPANY DOMUS HOLDINGS PRIVAT E LIMITED. AS SUCH IT CANNOT BE DENIED THAT NO INTEREST IS PAID B Y THE COMPANY DOMUS HOLDINGS PRIVATE LIMITED TO THE ASSESSEE COMP ANY. IN FACT INTEREST IS PAID BY DOMUS HOLDINGS PRIVATE LIMITED, WHICH IS NOT - 10- ITA NO. 3630/DEL/2013 BOOKED/SHOWN BY THE ASSESSEE COMPANY. MOREOVER, DEN IAL OF THE ASSESSEE IS NOT ACCOMPANIED WITH ANY EVIDENCE TO SU GGEST THAT INTEREST HAS NOT BEEN PAID BY' THE-COMPANY DOMUS HOLDINGS PR IVATE LIMITED. ONUS CAST UPON THE ASSESSEE COMPANY HAS NOT BEEN DI SCHARGED BY IT. UNDER THESE CIRCUMSTANCES, AN AMOUNT OF RS.2,60,68, 000/- WAS ADDED TO THE TAXABLE INCOME OF THE ASSESSEE COMPANY ON AC COUNT OF UNACCOUNTED ACCRUED INTEREST. 8. THE LD. CIT(A) DELETED THE ADDITION SO MADE BY T HE LD. CIT(A) BY OBSERVING AS UNDER: REGARDING THE SECOND GROUND OF ADDITION, I FIND THAT THE APPELLANT HAD ADVANCED INTEREST FREE LOAN TO ITS HO LDING COMPANY M/S. DOMUS HOLDING LTD., HOWEVER AS PART OF ITS CORPORATE STRATEGY, NO INTEREST EXPENSES WERE TO BE PAID/RECEIVED IN RESPECT OF SUCH INTRA-GROUP TRANSF ER OF FUNDS. AS HELD IN THE PARA.6.2 ABOVE, THE AO CANNOT BE IN THE SHOES OF THE APPELLANT AND GIVE VERDICT ON THE BUSINESS DECI SIONS OF THE APPELLANT. THE FACT THAT NO INTEREST WAS PAID BY M/ S. DOMUS HOLDING IS EVIDENT BY ITS CONFIRMATION AND RELEVANT ACCOUNTS. THEREFORE, THE ACTION OF THE AO BASED ON INCORRECT INTERPRETATION OF THE NARRATION BY DISREGARDING THE COPY OF ACCOUNTS AND TREATMENT BY M/S. DOMUS HOLDING IN THE IR BOOKS, WAS ARBITRARY AND THEREFORE, THE ADDITION MADE ON T HIS GROUND IS DELETED. - 11- ITA NO. 3630/DEL/2013 9. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE A.O AND THE LD. CIT(A) AN D THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. THE UNDISPUTED FA CTS ON RECORD ARE THAT AS PER COPY OF ACCOUNT, M/S DOMUS HOLDINGS PV T. LTD., HAS PAID INTEREST TO THE ASSESSEE COMPANY TO THE TUNE OF RS. 2,60,68,000/- AND NO CORRESPONDING INCOME HAS BEEN ACCOUNTED IN ITS B OOKS OF ACCOUNTS. THIS FACT IS EVIDENT FROM THE COPY OF ACCOUNT OF M/ S DOMUS HOLDINGS PVT. LTD WHICH IS NOT DISPUTED. MOREOVER, DENIAL B Y THE ASSESSEE IS NOT ACCOMPANIED BY ANY DOCUMENTARY EVIDENCE AND ONUS TO PROVE THE SAME LIES ON THE ASSESSEE WHICH HAS NOT BEEN DISCHA RGED. THE LD. CIT(A) HAS DELETED THE ADDITION BY OBSERVING THAT T HE ASSESSING OFFICER CANNOT SIT IN THE SHOES OF THE ASSESSEE AND NO INTE REST WAS PAID BY M/S DOMUS HOLDINGS PVT. LTD AS PER THE ACCOUNTS. BUT W HAT IS THE POSITION IN THE ACCOUNTS HAS NOT BEEN BROUGHT ON RECORD BY T HE LD. CIT(A) AND NO ADDITIONAL EVIDENCE HAS BEEN PUT FORTH BY THE AS SESSEE BEFORE THE LD. CIT(A) AND NOTHING HAS BEEN CONTROVERTED TO THE ASSESSING OFFICER IN THIS REGARD. THEREFORE, THE LD. CIT(A) HAS ERRE D IN LAW IN DELETING SUCH ADDITION. ACCORDINGLY, WE CONFIRM THE ADDITIO N MADE BY THE ASSESSING OFFICER AND ALLOW GROUND NO. 3 OF THE REV ENUE. - 12- ITA NO. 3630/DEL/2013 10. AS REGARDS GROUND NO. 4, BRIEF FACTS OF THE CA SE ARE THAT AN AMOUNT OF RS. 28,478/- HAS BEEN DEBITED TO THE PROF IT AND LOSS ACCOUNT ON ACCOUNT OF INTEREST ON WHICH DEPOSIT OF TDS AND ACCORDINGLY, THE ASSESSING OFFICER TREATED THE SAME AS PENALTY AND D ISALLOWED THE SAME AND ADDED TO THE INCOME OF THE ASSESSEE. THE LD. C IT(A) DELETED THE DISALLOWANCE BY HOLDING THAT THIS DISALLOWANCE HAD ALREADY BEEN MADE BY THE ASSESSEE AND, THEREFORE, FOR AVOIDING DUPLIC ATION, THE SAME IS DELETED. 11. IN THIS REGARD, NOTHING HAS BEEN BROUGHT ON REC ORD BY THE LD. COUNSEL FOR THE ASSESSEE TO SUGGEST THAT THE SAID A MOUNT HAS ALREADY BEEN ADDED BACK IN THE COMPUTATION OF INCOME AND AC CORDINGLY, THE LD. CIT(A) ALSO HAS NOT BROUGHT ON RECORD SUCH COMP UTATION WHERE THE SAID AMOUNT HAS BEEN ADDED BACK. IN THE ABSENCE OF THE SAME, THE ORDER OF THE LD. CIT(A) CANNOT BE UPHELD AND THE SA ME IS DIRECTED TO BE REVERSED. ACCORDINGLY, THE ORDER OF THE ASSESSING OFFICER IS RESTORED. THUS, GROUND NO. 4 OF THE REVENUE IS ALLOWED. 12. APROPOS GROUND NO. 5, THE BRIEF FACTS ARE THAT DURING THE YEAR AN AMOUNT OF RS.4,42,904/- HAS BEEN DEBITED TO THE PRO FIT A LOSS ACCOUNT UNDER THE HEAD 'LICENSE FEE'. PERUSAL OF THE DETAIL S FILED REVEAL THAT - 13- ITA NO. 3630/DEL/2013 THIS WAS PAID TO ROC FOR INCREASING THE CAPITAL STR UCTURE OF THE COMPANY. OUT OF THIS, AN AMOUNT OF RS.357678/- WAS VOLUNTARILY ADDED BACK BY THE ASSESSEE COMPANY. ON PERUSAL OF THE DET AILS FURNISHED IT WAS NOTICED THAT THE OUT OF THE REMAINING SUM, AN A MOUNT OF RS.74,850/- WAS ALSO SPENT TOWARDS INCREASING THE C APITAL STRUCTURE. AS SUCH AN AMOUNT OF RS.74,850/- WAS TREATED AS CAPITA L EXPENDITURE IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT REPOR TED IN 225 ITR 798 [BROOKE BOND INDIA LTD. CIT]. AND, THE SAME WAS ADD ED TO TAXABLE INCOME OF THE ASSESSEE COMPANY. 13. THE LD. CIT(A) DELETED THE ADDITION AND HIS FIN DINGS ARE REPRODUCED HEREINBELOW FOR READY REFERENCE: REGARDING THE DISALLOWANCE ON ACCOUNT OF PAYMENT O F ROC FEE FOR INCREASE IN SHARE CAPITAL, I FIND THAT THE APPE LLANT, IN ITS COMPUTATION OF INCOME HAD ALREADY ADDED BACK AN AMO UNT OF RS.3,57,678/- IN RESPECT OF AUTHORIZATION FEE FOR I NCREASE IN SHARE CAPITAL. THE SAME CANNOT BE DISALLOWED AGAIN. IN VIEW OF THIS THE ADDITION ON THIS GROUND IS DELETED. 14. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE A.O AND THE LD. CIT(A) AN D THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. IT IS AN ADMITTED FACT THE ASSESSEE HAS - 14- ITA NO. 3630/DEL/2013 PAID RS. 4,42,904/- FOR INCREASING THE CAPITAL STRU CTURE OF THE COMPANY OUT OF WHICH THE ASSESSEE HAS ADDED BACK RS. 3,57,6 78/- VOLUNTARILY IN THE COMPUTATION OF INCOME BUT HAS NOT ADDED BACK RS . 74,850/- WHICH IS ALSO SPENT TOWARDS INCREASE OF CAPITAL STRUCTURE AS OBSERVED BY THE ASSESSING OFFICER IN VIEW OF THE DECISION OF THE HO N'BLE SUPREME COURT IN THE CASE OF BROOK BOND INDIA LTD VS. CIT REPORTE D IN 225 ITR 798 [SC], SUCH EXPENDITURE CANNOT BE TREATED AS REVENUE EXPENDITURE. AS REGARDS THE LD. CIT(A), HE HAS DELETED THE ADDITION BY OBSERVING THAT THE ASSESSEE HAD ALREADY ADDED BACK AN AMOUNT OF RS . 3,57,678/- BUT HAS NOT GIVEN HIS FINDING WITH REGARD TO RS. 74,850 /- AND ACCORDINGLY, THE ORDER OF THE LD. CIT(A) CANNOT BE ACCEPTED AND SAME IS DIRECTED TO BE REVERSED AND THE ORDER OF THE ASSESSING OFFICER IS RESTORED. THUS, GROUND NO. 5 OF THE REVENUE IS ALSO ALLOWED. 15. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 28.08 .2017. SD/- SD/- [KULDIP SINGH] [B.P. JAIN] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28 TH AUGUST, 2017 VL/ - 15- ITA NO. 3630/DEL/2013 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI