Mynd Solutions P.Ltd, Gurgaon V. ACIT, circle-17(1), New Delhi

ITA 6633/DEL/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4168 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 16-10-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: AFSAR JAMIL
• Keywords: Capital asset; Revenue expenditure; Capital expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : E : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.6633/DEL/2018 ASSESSMENT YEAR: 2010-11 MYND SOLUTIONS P. LTD., PLOT NO.280, UDYOG VIHAR, PHASE-IV, GURGAON. PAN: AADCM1046J VS. ACIT, CIRCLE-17(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AFSAR JAMIL, CA REVENUE BY : MS RINKU SINGH, SR.DR DATE OF HEARING : 12.03.2019 DATE OF PRONOUNCEMENT : 13.03.2019 ORDER PER SHRI R.K. PANDA, AM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 25 TH SEPTEMBER, 2018 OF THE CIT(A)-6, DELHI, RELATING TO ASSESSMENT YEAR 2010-11. 2. ALTHOUGH A NUMBER OF GROUNDS HAVE BEEN RAISED BY THE ASSESSEE, THEY ALL RELATE TO THE ORDER OF THE CIT(A) IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN TREATING THE PROJECT EXPENSES OF RS.1,48,28,489/- AS CAPITAL EXPENDITURE AS AGAINST REVENUE EXPENDITURE TREATED BY THE ASSESSEE. ITA NO.6633/DEL/2018 2 3. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF PROVIDING CONSULTANCY AND PROFESSIONAL SERVICES. IT FILED ITS RETURN OF INCOME ON 11 TH OCTOBER, 2010 DECLARING TOTAL INCOME OF RS.1,78,29 ,443/-. THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 2 ND MARCH, 2013. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED THAT THE ASSESSEE IN ITS CO MPUTATION OF INCOME HAS CLAIMED 100% DEDUCTION ON ACCOUNT OF CAPITALIZED PROJECT EX PENSES OF RS.1,48,28,489/- AS REVENUE EXPENDITURE, THE CASE OF THE ASSESSEE WAS R EOPENED BY ISSUE OF NOTICE U/S 148. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3)/147 WHEREIN HE MADE AN ADDITION OF RS.1,48,28,489/- TREATING THE PROJECT E XPENSES AS CAPITAL EXPENDITURE IN NATURE. 4. IN APPEAL, THE LD.CIT(A) UPHELD THE ACTION OF TH E ASSESSING OFFICER. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT IDENTICAL EXPENDITURE HAS BEEN TREATED BY THE ASSESSING OFFIC ER IN THE SUBSEQUENT ASSESSMENT YEARS AS REVENUE EXPENDITURE IN NATURE. THEREFORE, HE HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO CONSIDER THE ISSUE AFRESH IN THE LIGHT OF HIS FINDINGS IN THE SUBSEQUE NT YEARS. 7. THE LD. DR, ON THE OTHER HAND, STRONGLY OPPOSED THE ARGUMENTS ADVANCED BY THE LD. COUNSEL FOR THE ASSESSEE AND HEAVILY RELIED ON THE ORDER OF THE ASSESSING OFFICER ITA NO.6633/DEL/2018 3 AND CIT(A). SHE SUBMITTED THAT THE FACTS OF THIS YEAR ARE DIFFERENT FROM THE FACTS OF THE SUBSEQUENT YEARS. FURTHER, THE LD.CIT(A) HAS G IVEN A CATEGORICAL FINDING AS TO WHY THE SAID EXPENDITURE SHOULD BE TREATED AS CAPITAL E XPENDITURE IN NATURE. SHE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) SHOULD BE UPHELD AND THE GROUNDS RAISED BY THE ASSESSEE SHOULD BE DISMISSED. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BOTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OF FICER, IN THE ASSESSMENT ORDER HAS CONSIDERED THE PROJECT EXPENDITURE OF RS.1,48,28,48 9/- AS CAPITAL IN NATURE ON THE GROUND THAT THE ASSESSEE HAS TREATED THESE ASSETS A S CAPITAL ASSETS AND HAS DULY MADE ADDITION TO FIXED ASSETS SCHEDULE AND HAS CLAIMED D EPRECIATION. HOWEVER, WE FIND THE ASSESSEE HAS CLAIMED CAPITALIZED PROJECT EXPENS ES OF RS.1,48,28,489/- AS REVENUE EXPENSES IN THE COMPUTATION OF INCOME. THE EXPLANA TION GIVEN BY THE ASSESSEE, ACCORDING TO THE ASSESSING OFFICER, IS NOT SATISFAC TORY FOR WHICH HE TREATED THE EXPENDITURE AS CAPITAL IN NATURE WHICH HAS BEEN UPH ELD BY THE CIT(A). IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT UNDER IDENTICAL CIRCUMSTANCES, THE ASSESSING OFFICER IN THE SUBSEQUENT YEARS IN THE OR DER PASSED U/S 143(3) HAS CONSIDERED THE EXPENDITURE AS REVENUE EXPENDITURE I N NATURE. WE, THEREFORE, DEEM IT APPROPRIATE TO RESTORE THE MATTER TO THE FILE OF TH E ASSESSING OFFICER WITH A DIRECTION TO ADJUDICATE THE ISSUE AFRESH IN THE LIGHT OF HIS FIN DINGS IN THE SUBSEQUENT YEARS SO AS TO MAINTAIN CONSISTENCY IN HIS APPROACH. THE ASSESSIN G OFFICER SHALL DECIDE THE ISSUE AS PER FACT AND LAW, AFTER GIVING DUE OPPORTUNITY OF B EING HEARD TO THE ASSESSEE. WE HOLD ITA NO.6633/DEL/2018 4 AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE A SSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL FILED BY THE ASS ESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 3.03.2019. SD/- SD/- (KULDIP SINGH) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT M EMFBER DATED: 13 TH MARCH, 2019 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI