ITO, New Delhi V. M/s. Speednet Cables (P) Ltd., New Delhi

ITA 5894/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7380 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 1
• Next Hearing Date: 23-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 31-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B L GUPTA ITP

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC-I : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NO.5894/DEL/2014 ASSESSMENT YEAR : 2010-11 ITO, WARD-9(1), NEW DELHI. VS. SPEEDNET CABLES (P) LTD., 52, TRILOKIYA APPTT., PLOT NO.85, IP EXTENSION, PATPARGANJ, NEW DELHI. PAN: AAHCS8311G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI B.L. GUPTA, ITP DEPARTMENT BY : SHRI DEEPAK GARG, SR. DR DATE OF HEARING : 23.06.2016 DATE OF PRONOUNCEMENT : 23.06.2016 ORDER THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER PASSED BY THE CIT(A) ON 26.8.2014 IN RELATION TO TH E ASSESSMENT YEAR 2010-11. ITA NO.5894/DEL/2014 2 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE ALLOWING OF DEDUCTION OF EXPENSES AMOUNTING TO RS.33,84,154/- I NCURRED BY THE ASSESSEE. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE, INTER ALIA, SHOWED SALE OF RS.8,23,590/-, AGAINST WHICH THE EX PENSES AMOUNTING TO RS.33,84,154/- WERE CLAIMED AS DEDUCTION. ON BEING CALLED UPON TO FURNISH THE EVIDENCE OF PURCHASE AND SALE, THE ASSE SSEE SUBMITTED DETAIL OF PURCHASES, WHICH HAS BEEN SET OUT IN THE ASSESSM ENT ORDER. AS THE SALES WERE MADE IN CASH, THE ASSESSEE SUBMITTED THA T NO RECORD WAS MAINTAINED OF THE NAMES OF SELLERS. SINCE THE ASSES SEE DID NOT FURNISH SUCH DETAILS, THE AO HELD THAT HUGE EXPENSES OF RS .33,84,154/- CLAIMED IN THE PROFIT & LOSS ACCOUNT COULD NOT BE ALLOWED A S DEDUCTION. THE LD. CIT(A) OVERTURNED THE ASSESSMENT ORDER ON THIS POIN T AND ALLOWED THE DEDUCTION. 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSING THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT T HE ASSESSEE MADE SALES TO THE TUNE OF RS.8,23,590/- AND GAVE DETAILS OF PU RCHASES AS HAS BEEN ITA NO.5894/DEL/2014 3 RECORDED ON PAGE 2 OF THE ASSESSMENT ORDER. THE GE NUINENESS OF THE PURCHASES HAS NOT BEEN CHALLENGED BY THE AO. THE M ERE FACT THAT THE ASSESSEE MADE SALES IN CASH, CANNOT BE A REASON TO DOUBT THE GENUINENESS OF THE BUSINESS TRANSACTIONS. THIS PROVES THE CARRY ING ON OF BUSINESS. MAJOR PART OF EXPENSES INCURRED BY THE ASSESSEE INC LUDE DIRECTORS REMUNERATION, WHICH PAYMENT WAS MADE AFTER DUE DEDU CTION OF TAX AT SOURCE. WHEN THE FACTUM OF THE CARRYING ON OF THE BUSINESS IS PROVED, THERE CAN BE NO REASON TO DISALLOW THE EXPENSES INC URRED FOR THE PURPOSE OF BUSINESS. I, THEREFORE, APPROVE THE VIEW TAKEN BY THE LD. CIT(A). 5. IN THE RESULT, THE APPEAL IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 23.06.2 016. SD/- [R.S. SYAL] ACCOUNTANT MEMBER DATED, 23 RD JUNE, 2016. DK ITA NO.5894/DEL/2014 4 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.