Gagrat & Co., New Delhi V. ACIT, New Delhi

ITA 4537/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4804 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2011-2012
• Appeal Filed On: 09-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIKA S MADAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : C : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI JOGINDER SINGH, JUDICIAL MEMBER ITA NO.4537/DEL/2015 ASSESSMENT YEAR : 2011-12 GAGRAT & CO., SUPREME COURT ADVOCATES, PLAZA CINEMA BUILDING, CONNAUGHT CIRCUS, NEW DELHI. PAN: AAAFG1726H VS. ACIT, CIRCLE-39(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIKAS MADAN, ADVOCATE DEPARTMENT BY : SHRI ARUN KUMAR YADAV, SR. DR DATE OF HEARING : 01.08.2018 DATE OF PRONOUNCEMENT : 01.08.2018 ORDER PER R.S. SYAL, VP: THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF TH E ORDER PASSED BY THE CIT (A) ON 28.05.2015 IN RELATION TO THE ASSESSMENT YEAR 2011-12. ITA NO.4537/DEL/2015 2 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF RS.6 LAC, BEING, THE AMOUNT PAID BY THE ASSESSEE-FIRM TO SHRI U.A. RANA (RESIDENT PARTNER) AS REIMBURSEMENT OF RS.4 LAC PER ANNUM TOWARDS RUNNING AND MAINTENANCE OF MOTOR CAR; RS.1, 20,000/- P.A. TOWARDS MAINTENANCE OF CONSULTATION ROOM AT HIS RESIDENCE; AND RS.80,000/- PER ANNUM TOWARDS ENTERTAINMENT EXPENSES FOR CLIENTS AT THE CONSULTATION ROOM. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A PARTNERSHIP FIRM OF ADVOCATES PRACTISING AT THE HON BLE SUPREME COURT OF INDIA. IT CLAIMED DEDUCTION , INTER ALIA , OF RS.6 LAC, BEING, THE AMOUNT PAID TO SHRI U.A. RANA (RESIDENT PARTNER) TOWARDS EXPENS ES AS ENUMERATED ABOVE. ON BEING CALLED UPON TO JUSTIFY THE DEDUCTIO N, THE ASSESSEE COULD PRODUCE BILLS/VOUCHERS WHICH WERE IN THE NAME OF TH E PARTNER AND NOT THE ASSESSEE FIRM. THE ASSESSING OFFICER OPINED THAT T HE PARTNERSHIP FIRM CAN LEGITIMATELY CLAIM DEDUCTION ON ACCOUNT OF INTEREST AND SALARY TO PARTNERS SUBJECT TO THE LIMITS U/S 40(B) OF THE ACT AND, HEN CE, SUCH EXPENSES INCURRED WERE NOT DEDUCTIBLE. HE, THEREFORE, MADE DISALLOWA NCE OF RS.6 LAC, WHICH CAME TO BE AFFIRMED IN THE FIRST APPEAL. ITA NO.4537/DEL/2015 3 4. HAVING HEARD BOTH THE SIDES AND PERUSED THE RELE VANT MATERIAL ON RECORD, IT IS OBSERVED THAT SIMILAR DISALLOWANCE OF RS.6 LAC WAS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT FOR THE IMMEDIA TELY PRECEDING ASSESSMENT YEAR, NAMELY, 2010-11, WHICH STOOD AFFIR MED IN THE FIRST APPEAL. THE MATTER CAME UP FOR CONSIDERATION BEFORE THE TRI BUNAL. VIDE ORDER DATED 08.03.2016, THE TRIBUNAL, IN ITA NO.6067/DEL/ 2013, HAS RESTORED THE MATTER TO THE FILE OF ASSESSING OFFICER FOR DECIDIN G IT AFRESH AFTER GIVING CERTAIN DIRECTIONS. SINCE THE FACTS AND CIRCUMSTAN CES OF THE INSTANT YEAR ARE MUTATIS MUTANDIS SIMILAR TO THOSE OF THE IMMEDIATELY PRECEDING YEAR , RESPECTFULLY FOLLOWING THE PRECEDENT, WE SET ASIDE THE IMPUGNED ORDER TO THIS EXTENT AND REMIT THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THIS ISSUE AFRESH IN THE HUE OF THE OBSERV ATIONS MADE BY THE TRIBUNAL FOR THE PRECEDING YEAR. 5. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 01.08.201 8. SD/- SD/- [JOGINDER SINGH] [R.S. SYAL] JUDICIAL MEMBER VICE PRESIDENT DATED, 01 ST AUGUST, 2018. ITA NO.4537/DEL/2015 4 DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.