Express Drilling Systems LLC, New Delhi V. ADIT, Dehradun

ITA 565/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81928 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 31-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B: NEW DELHI BEFORE SHRI J.S. REDDY, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K, JUDICIAL MEMBER ITA NO. 565/DEL/2013 ASSESSMENT YEAR 2009-10 EXPRESS DRILLING SYSTEMS LLC VS. ADIT C/O NANGIA & COMPANY INTERNATI ONAL TAXATION, SUITE 4A, PLAZA M-6, JASOLA INCOME TAX OFFICE, SUBHASH ROAD NEW DELHI 110 025 DEHRAD UN 248001. (AABCE6891R) (APPELLANT) (RESPONDEN T) APPELLANT BY : S HRI AMIT ARORA, CA RESPONDENT BY : SHRI SANJEEV KUMAR, CIT (DR) ORDER PER GEORGE GEORGE K, JUDICIAL MEMBER THIS APPEAL AT THE INSTANCE OF ASSESSEE IS DIRECTED AGAINST CIT(A)S ORDER DATED 21.11.2012. THE RELEVANT ASSTT. YEAR IS 2009- 10. THE GROUNDS RAISED READ AS FOLLOWS :- ADDITION QUA RIG STANDBY CHARGES 1. THAT THE LEARNED COMMISSIONER OF INCOME-TAX APPELAS -1, DEHRADUN (HEREINAFTER REFERRED TO AS CIT) ERRED ON FACTS AND IN LAW UPH OLDING THE ORDER OF THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS AO) THAT RIG STANDBY CHARGES OF RS. 54,600,000 PAID BY THE APPELLANT STAND TO BE DISAL LOWED ON THE GROUND THAT THERE WAS NO PLAUSIBLE BUSINESS EXIGENCY FOR SUCH EXPENDI TURE. 2. THAT THE LEARNED CIT ERRED IN NOT APPRECIATING THA T BUSINESS EXPENDITURE CANNOT BE DISALLOWED SIMPLY ON THE GROUND THAT THE BUSINES S IS WAS RUN BY THE TAXPAYER IN A MANNER WHICH WAS NOT PRUDENT AS PER THE AO/CIT . ITA NO. 565/DEL/13 2 3. THAT THE LEARNED CIT ERRED IN HOLDING THAT IT COULD NOT BE ESTABLISHED THAT THE RIG STANDBY CHARGES WERE EXPENDED WHOLLY AND EXCLUSIVEL Y FOR THE PURPOSE OF BUSINESS. ADDITION QUA PURCHASE OF MATERIAL 4. THAT THE LEARNED CIT ERRED IN HOLDING THAT EXPENDIT URE OF RS. 92,034,476 IN RESPECT OF PURCHASE OF MATERIAL ATTRACTED THE PRO VISIONS OF TAX DEDUCTION AT SOURCE AS ENVISAGED BY CHAPTER XVII-B OF THE INCOME -TAX ACT, 1961. 5. THAT THE LEARNED CIT ERRED IN UPHOLDING THE ORDER O F THE ASSESSING OFFICER THAT EXPENDITURE OF RS. 92,034,476/- IN RESPECT OF PURC HASE OF MATERIAL ON WHICH TAX WAS NOT DEDUCTIBLE AT SOURCE, WAS TO BE DISALLOWED UNDER SECTION 40(A)(IA). 2. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ABOVE TWO ISSUES RAISED IN THIS APPEAL ARE COVERED BY ORDER OF TRIBU NAL IN ASSESSEES OWN CASE IN RESPECT TO ASSTT. YEAR 2008-09 IN ITA NO. 5559/2011 (ORDER DATED 17/05/2013). IT WAS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSE E BOTH THE ISSUES WHICH ARE RAISED IN THIS APPEAL WERE CONSIDERED BY THE TRIBUN AL FOR THE ASSTT. YEAR 2008-09 AND THE SAME WAS REMANDED TO THE FILE OF THE AO FO R DE NOVO CONSIDERATION. THEREFORE IT WAS SUBMITTED IN THIS ASSTT. YEAR ALSO THE SAME VIEW CAN BE TAKEN BY THE TRIBUNAL. THE LD. DR DID NOT HAVE ANY OBJECTIO N FOR THE ISSUES RAISED IN THIS APPEAL TO BE REMITTED BACK TO THE FILE OF THE AO FO R FRESH CONSIDERATION. 3. SINCE BOTH PARTIES HAVE AGREED THAT THE TWO ISSUES RAISED IN THIS APPEAL CAN BE RESTORED TO THE FILE OF AO FOR DE NOVO CONSI DERATION AND ALSO FOR THE PURPOSE OF MAINTAINING CONSISTENCY , THE TWO ISSUES RAISED IN THIS APPEAL ARE ALSO RESTORED TO THE FILE OF AO FOR FRESH CONSIDERATION . IT IS ORDERED ACCORDINGLY. ITA NO. 565/DEL/13 3 4. IN THE RESULT APPEAL FILED BY THE ASSESEE IS ALLOWED FOR STATISTICAL PURPOSES. THIS DECISION WAS PRONOUNCED IN THE OPEN C OURT ON 13 TH NOVEMBER, 2014. SD/- SD/- (J.S. REDDY) ( GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 13 TH NOVEMBER, 2014 *VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR, ITAT