ACIT, New Delhi V. M/s. Micro Abrasives (India) Pvt. Ltd., New Delhi

ITA 5394/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86950 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 24-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 03-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P DAM KANUNJNA
• Keywords: Business income
• Section: 143(3); 14A

Judgement Text

IN TH E INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E : NEW DELHI BEFORE SHRI GEORGE GEORGE K. , JUDICIAL MEMBER AND SHRI B.C. MEENA , ACCOUNTANT MEMBER ITA NO. 5394 /DEL/201 3 ASSESSMENT YEAR 200 9 - 10 ACIT, CIRCLE 6(1), NEW DELHI VS. M/S. MICRO ABRASIVES (INDIA) PVT. LTD. ROOM NO.413, C.R. BUILDING FLAT NO.511,5 TH FLOOR, MECANTILE HOUSE I.P. ESTATE, NEW DELHI 15 - K.G. MARG, NEW DELHI - 110001 (PAN AAA C M 0341 H ) ( APPELLANT) (RESPONDENT) DATE OF HEARING : 2 4 .02.2015 DATE OF PRONOUNCEMENT : 25 .02.2015 APPELLANT BY : SHRI SAMEER KAPOOR, CA. RESPONDENT BY: SH RI P. DAM K A N UNJNA , SR. D.R. ORDER PER SHRI GEORGE GEORGE K , J M : 1. TH IS APPEAL , AT THE INSTANCE OF THE REVENUE , IS DIRECTED AGAINST THE CIT(A) S ORDER DATED 29 .0 7 .2013 . THE RELEVANT ASSESSMENT YEAR IS 2009 - 10. 2. THE SOLITARY ISSUE THAT ARISES FOR OUR CONSIDERATION IS WHETHER THE CIT(A) IS JUSTIFIED IN RESTRICTING THE DISALLOWANCE TO RS.20,86,836/ - , OUT OF TOTAL DISALLOWANCE OF RS.1,17,48,112/ - MADE BY THE AO ON ACCOUNT OF EXPENDITURE NOT RELATABLE TO THE BUSINESS INCOME. IT A NO. 5394 /DEL /201 3 2 3. BRIEFLY STATED THE FACTS OF THE CASE ARE AS FOLLOWS. THE ASSESSEE IS A COMPANY. THE R ETURN OF INCOME WAS FILED ON 29.09.2009 , DECLARING TOTAL INCOME OF RS.1,13,05,370/ - . THE S CRUTINY ASSESSMENT YEAR WA S COMPLETED BY ORDER DATED 07.12.2011 U/S 143(3) OF THE ACT . THE ASSESSING OFFICER MADE DISALLOWANCE U/S 14A OF THE ACT R.W.R. 8D OF THE I.T. RULES AMOUNTING TO RS.14,97,765/ - . FURTHER, AO DISALLOWED EXPENDITURE OF RS.1,17,48,112/ - , OUT OF THE AGGREGATE EX PENDITURE OF RS.1,54,58,043/ - CLAIMED BY THE ASSESSEE . 4. AGGRIEVED BY THE ASSESSMENT ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). THE CIT(A) DELETED THE DISALLOWANCE U/S 14A AND REDUCED THE DISALLOWANCE OF EXPENDITURE MADE BY THE AO FROM RS.1,17 ,48,112/ - TO RS.20,86,836/ - . 5. THE REVENUE BEING AGGRIEVED BY REDUCTION OF DISALLOWANCE OF EXPENDITURE BY THE CIT(A) IS IN APPEAL BEFORE US. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CIT(A) HAS ADOPTED THE PARTICULAR FORMULA AND REDUCED THE DISALLOWANCE MADE BY THE AO TO RS.20,86,836/ - . IT WAS SUBMITTED THAT THE PRINCIPLE FOR REDUCING THE DISALLOWANCE OF EXPENDITURE BY THE CIT(A) WAS ADOPTED BY THE ASSESSING OFFICER IN THE SUBSEQUENT ASSESSMENT ORDERS FOR THE AYS. 2011 - 12 AND 2012 - 13. THE COPIES OF THE ASSESSMENT ORDER S FOR A.YS. 2011 - 12 AND 2012 - 13 , WERE PLACED ON RECORD. 6. THE LD. DR PRESENT WAS UNABLE TO CONTROVERT THE SUBMISSIONS MADE BY THE LD. AR. IT A NO. 5394 /DEL /201 3 3 7. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE CIT(A) HAD ADOPTED THE PERCENTAGE OF AVERAGE INVESTMENT OF FIXED ASSETS TO THE AVERAGE FUNDS AVAILABLE AND ACCORDINGLY HAD REDUCED THE DISALLOWANCE OF EXPENDITURE MADE BY THE AO FROM RS.1,17,48,112/ - TO RS.20,86,836/ - . WE ARE NOT EXAMINING OR DWELLING UPON THE C ORRECTNESS OF THE METHOD ADOPTED BY THE CIT(A), BECAUSE FOR THE AYS . 2011 - 12 AND 2012 - 13 , WE NOTICE THAT T HE ASSESSING OFFICER HAD ADOPTED THE SAME PRINCIPLE FOLLOWED BY THE CIT(A) FOR THE CURRENT ASSESSMENT YEAR AND ACCORDINGLY HAS MADE THE DISA LLOWANCE IN RESPECT OF THOSE ASSESSMENT YEAR S . SINCE REVENUE ITSELF HAS ADOPTED THE METHOD ADOPTED BY THE CIT(A) FOR THE CURRENT YEAR IN THE SUBSEQUENT ASSESSMENT YEAR S, WE SEE NO REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) AND WE UPHOLD THE SAME. IT IS ORDERED ACCORDINGLY. 8 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. TH E DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 5 TH FEBRUARY , 201 5 . SD/ - SD/ - ( B.C. MEENA ) (GEORGE GEORGE K.) A CCOUNTANT M EMBER J UDICIAL MEMBER DATED: 25 TH FEBRUARY , 201 5 . AKS/ - COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST . REGISTRAR, ITAT, NE W DELHI IT A NO. 5394 /DEL /201 3 4 DATE 1. DRAFT DICTATED ON 2 5 .02.2015 PS 2. DRAFT PLACED BEFORE AUTHOR 2 5 .02.2015 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE S R.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.