M/s. Nuchem Infrastructure Ltd., New Delhi V. ITO, New Delhi

ITA 5507/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7410 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 22-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 10-10-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SANJAY KALRA
• Keywords: Business income; Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC-I : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NO.5507/DEL/2014 ASSESSMENT YEAR : 2010-11 NUCHEM INFRASTRUCTURE LTD., (FORMERLY NUCHEM MACHINE TOOLS LTD.),BARAR HOUSE ESTATE, BARA TOOTI CHOWK, SCHOOL LANE, SADAR BAZAR, NEW DELHI. PAN: AAACN3196R VS. ITO, WARD-13(3), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANJAY KALRA, CA DEPARTMENT BY : SHRI DEEPAK GARG, SR. DR DATE OF HEARING : 22.06.2016 DATE OF PRONOUNCEMENT : 22.06.2016 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER PASSED BY THE CIT(A) ON 31.7.2014 IN RELATION TO THE ASSES SMENT YEAR 2010-11. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF RS.32,84,682/-, BEING EXPENSES INCU RRED BY THE ASSESSEE. ITA NO.5507/DEL/2014 2 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE CLAIMED DEDUCTION FOR SALARY/WAGES, LEGAL AND PROFESSIONAL EXPENSES, TRAVELLING AND CONVEYANCE, INTEREST AND RENT, ETC., ALL TOTALI NG TO RS.32,84,682/-. THE AO OBSERVED THAT THE ASSESSEE IS DEALING IN INFRAST RUCTURE (CONSTRUCTION, ERECTION, BUILDING, ETC.) AND DEVELOPMENT OF INDUST RIAL PARK. SINCE NO BUSINESS ACTIVITY WAS SHOWN DURING THE YEAR, THE AO HELD THAT SUCH EXPENSES WERE NOT ALLOWABLE. FOLLOWING THE VIEW TA KEN BY HIM IN PRECEDING ASSESSMENT YEARS, HE MADE A DISALLOWANCE OF RS.32,84,682/-, WHICH CAME TO BE AFFIRMED IN THE FIRST APPEAL. 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED FROM THE ASSESS MENT ORDER THAT THE AO, IN MAKING THE DISALLOWANCE OF RS.32.84 LAC, HAS OBSERV ED THAT: THE ASSESSEE HAS NOT BEEN SHOWING ANY BUSINESS INCOME FOR THE LA ST SO MANY YEARS AND THE BUSINESS EXPENSES CLAIMED AGAINST SUCH INTEREST INCOME WERE BEING DISALLOWED BY THE REVENUE IN THE PRECEDING ASSESSME NT YEARS. THEREFORE, KEEPING IN VIEW THE ABOVE REASONS AND ALSO FOLLOWIN G THE LINE OF ACTION TAKEN IN THE PRECEDING ASSESSMENT YEARS , THE BUSINESS EXPENSES CLAIMED AGAINST THE INTEREST INCOME OF RS.32,84,682/- IS BE ING DISALLOWED AND ADDED ITA NO.5507/DEL/2014 3 BACK IN THE INCOME OF THE ASSESSEE. THE LD. AR HAS PLACED ON RECORD A COPY OF THE ASSESSMENT ORDER DATED 22.12.2011 FOR THE IM MEDIATELY PRECEDING ASSESSMENT YEAR, NAMELY, 2009-10, IN WHICH THE AO D ISALLOWED 20% OF TOTAL EXPENSES. NO ADDITION WAS MADE FOR THE A.Y. 2008-0 9 AS NO SCRUTINY ASSESSMENT WAS DONE. THE LD. AR DID NOT RAISE ANY O BJECTION TO THE SUSTENANCE OF DISALLOWANCE OF EXPENSES AT 20% AS WA S DONE IN THE IMMEDIATELY PRECEDING YEAR. THE LD. DR DID NOT RAIS E ANY SERIOUS OBJECTION TO IT. SINCE THE AO HIMSELF HAS TAKEN COGNIZANCE O F HIS ACTION TAKEN IN DISALLOWING THESE EXPENSES IN PRECEDING ASSESSMENT YEAR, FOLLOWING THE VIEW TAKEN BY HIM IN THE PRECEDING YEAR, I ORDER TO RESTRICT THE DISALLOWANCE AT 20% OF TOTAL EXPENSES. 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 22.06.201 6. SD/- [R.S. SYAL] ACCOUNTANT MEMBER DATED, 22 ND JUNE, 2016. DK ITA NO.5507/DEL/2014 4 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.