M/s Carnation Insurance Broking Company Pvt. Ltd, New Delhi V. DCIT, New Delhi

ITA 6015/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9553 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 25-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SARAS KUMAR
• Keywords: Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SH. H. S. SIDHU, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER ITA NO. 6015/DEL/2016 : ASSTT. YEAR : 2012-13 CARNATION INSURANCE BROKING COMPANY PVT. LTD., 3/16, SECOND FLOOR, SHANTI NIKETAN, NEW DELHI-110021 VS DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-5(2), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A AECC1772A ASSESSEE BY : NONE REVENUE BY : SH. SARAS KUMAR, SR. DR DATE OF HEARING: 16.12.2019 DATE OF PRONOUNCEMENT: 07.01.2020 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF LD. CIT (A)-35, NEW DELHI DATED 21.09. 2016. 2. DURING THE COURSE OF HEARING TODAY, NOBODY WAS P RESENT ON BEHALF OF THE ASSESSEE, NEITHER ANY ADJOURNMENT WAS SOUGHT, H ENCE THE MATTER BEING DECIDED ON MERITS BASED ON THE FACTS AVAILABL E ON RECORD. 3. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESS EE: ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT (A) IS NOT JUSTIFIED IN SUSTAINING THE DISALLOWANCE OF RS. 63,10,273/-, BEING THE AGGREGATE OF ALL THE EXPENSES DEBITED TO PROFIT AND LOSS ACCOUNT ON THE GROUND THAT THE BUSINESS OF THE APPELLANT HAD NOT COMMENCED AS IT HAD NOT GENERATED ANY REVEN UE. THE LD. CIT (A) HAS FAILED TO MAKE A DISTINCTION BETWEE N SET UP OF BUSINESS AND COMMENCEMENT OF BUSINESS. ITA NO. 6015/DEL/2016 CARNATION INSURANCE BROKING COMPANY PVT. LTD. 2 4. THE ASSESSEE INCURRED EXPENSES OF SALARIES, STAF F WELFARE, LOCAL CONVEYANCE & TRAVELLING EXPENSES AND CLAIMED THEM A S BUSINESS EXPENDITURE DURING THE YEAR. THE LD. CIT (A) CONFIR MED DISALLOWANCE OF EXPENSES AS BUSINESS HAS NOT COMMENCED. THE ASSESSE E HAS APPLIED FOR LICENSE FROM IRDA TO CARRY OUT BUSINESS OF DIRECT I NSURANCE BROKER FOR LIFE INSURANCE AND GENERAL INSURANCE. NO LICENSE HAS BEE N GRANTED DURING THE YEAR. HENCE, IT CAN BE SAID THAT BUSINESS HAS NOT T AKEN PLACE. THE CASES RELIED BY THE ASSESSEE HAVE BEEN PERUSED AND FOUND THAT THEY ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. PLACIN G RELIANCE ON THE JUDGMENT OF HONBLE HIGH COURT OF DELHI IN HUGHES S COTTS COMMUNICATIONS IN ITA NO. 1687 OF 2006 WHEREIN THE PLACING OF PURC HASE ORDER IS TREATED AS COMMENCEMENT OF BUSINESS AND KEEPING IN VIEW THE FACTS THAT THE ASSESSEE HAS NOT EMBARKED ANY BUSINESS ACTIVITY DUR ING THE YEAR AND IN THE ABSENCE OF EVEN THE LICENSE TO DO SO, THE EXPEN DITURE CLAIMED BY THE ASSESSEE CANNOT BE TREATED AS BUSINESS EXPENDITURE. WE DECLINE TO INTERFERE WITH THE ORDER OF THE LD. CIT (A). 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/01/2020. SD/- SD/- (H. S. SIDHU) (DR . B. R. R. KUMAR) JUDICIAL MEMBER ACCOUNT ANT MEMBER DATED: 07/01/2020 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR