ACIT, New Delhi V. M/s. Uday Management Services (P) Ltd., New Delhi

ITA 5726/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86961 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 05-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 09-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUNIL GOEL; SUHIL GOEL
• Assessee Lawyers: J P CHANDRAKER
• Keywords: Revenue expenditure; Capital expenditure
• Section: 14A; 2

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H : NEW DELHI BEFORE SHRI R.S.SYAL , ACCOUNTANT MEMBER AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 5726 /DEL/ 2012 (ASSESSMENT YEAR: 2009 - 10 ) ACIT CIRCLE - 18(1) NEW DELHI VS. UDAY MANAGEMENT SERVICES (P) LTD., IBC, M - 38/1, MIDDLE CIRCLE, CONNAUGHT PLACE, NEW DELHI PAN:AAACU1484B (APPELLANT) (RESPONDENT) APPELLANT BY : SH SUNIL GOE L & SUHIL GOEL, FCA RESPONDENT BY : J.P. CHANDRAKER, SR. DR DATE OF HEARING 05.01.2015 DATE OF PRONOUNCEMENT 25 .02.2015 O R D E R PER A. T. VARKEY , JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A), XXI, NEW DELHI DATED 09.08.2012 FOR ASSESSMENT YEAR 2009 - 10. 2. GROUNDS OF APPEAL ARE AS UNDER: - 1. LD. CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN REMITTING THE MATTER IN RESPECT OF DISALLOWANCE U/S 14A, BACK TO THE FILE OF THE AO BECAUSE: A) THE CIT(A), AS PER THE PROVISIONS OF SECTION 251 OF THE I.T. ACT IS NOT VESTED WITH THE POWER TO R EMIT ANY MATTER BACK TO THE AO. B) THE CIT(A) MISCONCEIVED THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF M/S MAXOPP INVESTMENT LTD., 2011 - TIOL - 753 - HC - DEL - 1I WHILE REMITTING THE MATTER BACK TO THE. AO AS HON'BLE DELHI HIGH COURT HAS HELD THAT RULE 8D OF THE INCOME TAX RULES IS APPLICABLE W.E.F. ASSESSMENT YEAR 2008 - 09 AND THE ASSESSMENT YEAR INVOLVED IN THIS CASE IS 2009 - 10. THUS, AS PER DECISION OF THE HON'BLE HIGH COURT IN THE CASE OF M/S MAXOPP INVESTMENT LTD. RULE 8D IS APPLICABLE IN THIS CASE. 2. 'LD. CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE DISALLOWANCE OF RS.33,81,664/ - MADE BY THE AO ON ACCOUNT OF EXPENSES INCURRED BY THE ASSESSEE ON INFRASTRUCTURE OF THE BUILDING BY TREATING THE SAME AS CAPITAL EXPENDITURE. 3. THE FIRST GROUND I.E. 1A AND 1B OF THE REVENUE IS THAT THE LD CIT(A) HAS ERRED BY REMITTING THE MATTER BACK TO THE AO FOR DECIDING THE DISALLOWANCE PAGE 2 OF 3 U/S 14A INCOME TAX ACT, 1961 (HEREIN AFTER THE ACT) , THOUGH HE HAS NO POWER U/S 251 OF THE ACT . 4. WE FIN D FORCE IN THE SUBMISSION OF THE REVENUE THAT THE LD CIT(A) SHOULD HAVE CONSIDERED ON MERIT, THE SAID GROUND RAISED BEFORE HIM. IN THE FITNESS OF THINGS WE ARE INCLINED TO SET - ASIDE THE IMPUGNED ORDER OF THE LD CIT(A) ON THIS ISSUE AND REMIT THE SAID ISSUE BACK TO THE FILE OF THE LD CIT(A) TO BE DECIDED IN ACCORDANCE TO LAW. 5. GROUND NO.2 IS REGARDING DELETION OF DISALLOWANCE OF RS.33,81,664/ - MADE BY THE AO ON ACCOUNT OF EXPENSES INCURRED BY THE ASSESSEE ON INFRASTRUCTURE OF BUILDING BY TREATING THE SAME AS CAPITAL EXPENDITURE. HAVING HEARD BOTH THE PARTIES WE FIND THAT LD CIT(A) HAS FOLLOWED HIS OWN ORDER IN THE ASSESSEES OWN CASE FOR THE PRECEDING ASSESSMENT YEAR I.E. FOR 2008 - 09. THE LD AR HAS BROUGHT TO OUR NOTICE THAT REVENUES APPEAL AGAINST THIS O RDER (I.E. FOR ASSESSMENT YEAR 2008 - 09) OF THE LD CIT(A) WAS UNSUCCESSFULLY CHALLENGED BEFORE THE TRIBUNAL AND THE TRIBUNAL DISMISSED THE REVENUE S APPEAL ON THIS ISSUE AND HELD AS UNDER ON 31 ST MARCH 2014 IN ITA NO.4709/DEL/2011 FOR ASSESSMENT YEAR 2008 - 09 . 2. DURING THE YEAR, THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF PROVIDING SERVICES. THE ASSESSEE HAS DEBITED REPAIRS AND MAINTENANCE OF RS.53,38,172/ - OUT OF WHICH ON BUILDING REPAIRING WAS OF RS.32,08,947/ - . THE SAME WAS DISALLOWED BY THE ASSESSING OFFICER. THE CLT(A) HAS GRANTED THE RELIEF BY HOLDING AS UNDER : - '3.3 IN THIS REGARD ID. AR HAS ALSO SUBMITTED COPY OF SCRUTINY ASSESSMENT FOR ASSESSMENT YEARS 2004 - 05, 2005 - 06 AND 2006 - 07, WHEREIN, NO ADDITION HAS BEEN MADE ON THIS ACCOUNT. I HAVE COMPARED THE F IGURES OF THE REPAIR AND MAINTENANCE ON ACCOUNT BUILDING FROM ASSESSMENT YEAR 2006 - 07, WHEREIN, REPAIR AND MAINTENANCE EXPENDITURE WAS FOUND TO THE TUNE OF RS . 24 . 31LACS. FURTHERMORE, AO HAS MADE DISALLOWANCE IN VERY ARBITRARY MANNER WITHOUT ASSIGNING ANY C OGENT REASON IN THIS REGARD. WHILE VERIFYING LEDGER ACCOUNT FOR THE PERIOD 0 1 . 04.2007 TO 31.3.200 8 , I HAVE FOUND THAT THEN ARE VERY PETTY EXPENSES INCURRED; LIKE PAYMENT TO CARPENTER, PLUMBER ETC. SO, AFTER GOING THROUGH THE LEDGER ACCOUNT AND BILL SUBMITT ED BY LD.AR IN THIS REGARD, THE EXPENDITURE WAS FOUND TO BE REVENUE EXPENDITURE IN NATURE. THEREFORE, IN MY CONSIDERED OPINION ACTION OF THE AO MAKING ADDITION OF RS . 32, 08, 947/ - WAS FOUND TO BE TOTALLY PAGE 3 OF 3 MISCONCEIVED. GROUND NO.1 IS ALLOWED IN FAVOUR OF THE APPELLANT.' 3. WE HAVE HEARD BOTH THE SIDES. THE LD DR WAS UNABLE TO DISLODGE THE FINDING GIVEN BY THE CIT(A) THAT THESE EXPENSES WERE VERY PETTY AND INCURRED FOR PAYMENT TO CARPENTERS, PLUMBERS, ETC. AND ALSO HE HAS GONE THROUGH LEDGER ACCOUNT AND BILLS SUBMITTED BEFORE HIM AND THE EXPENDITURE WAS FOUND TO BE REVENUE IN NATURE. IN ABSENCE OF ANY CONTRARY MATERIAL OR EVIDENCE, IT SHALL, NOT BE POSSIBLE TO REVERSE THESE SPECIFIC FINDINGS GIVEN BY CIT (A). IN VIEW OF THESE FACTS, WE FIND NO FAULT IN THE ORDE R OF CIT (A) AND WE DISMISS THIS REVENUE'S APPEAL . 6. SINCE THE LD DR, COULD NOT POINT OUT ANY CHANGE IN FACTS FOR THE ASSESSMENT YEAR 2008 - 09 AND IN RESPECT TO THE INSTANT ASSESSMENT YEAR 2009 - 10, WHICH IS UNDER CONSIDERATION BEFORE US , WE RESPECTFULLY FOLLOW THE ORDER OF THE CO - ORDINATE BENCH AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 5 . 02 . 2015 . - S D / - - S D / - ( R.S.SYAL ) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 5 / 02 / 2015 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI