M/S. COBRA INSTALACIONES Y SERVICIOS S.A.,NEW DELHI V. ADIT,CIRCLE-1(1), NEW DELHI

MA 237/DEL/2023

AI Insights

The case involves M/s Cobra Instalaciones Y Servicios SA, which appealed against the disallowance of engineering expenses by the ADIT, Circle-1(1), New Delhi, for the assessment years 2005-06 and 2006-07. The primary legal contention was regarding the disallowance of engineering expenses paid to the head office, questioned under the business exigency. Initially, the Tribunal's order dated 13.02.2023 did not address a specific ground for AY 2006-07 due to a clerical oversight, leading to a rectification application. The Tribunal acknowledged the oversight and corrected the application of the findings to include AY 2006-07, thus allowing the appeal partly for that year as well.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 397032 (ITAT-DELHI)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 29-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARPREET KAUR HANSRA
• Assessee Lawyers: NIRBHAY MEHTA
• Keywords: TDS

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : D : NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER Miscellaneous Application No.237/Del/2023 (ITA No.6602/Del/2013) Assessment Year: 2006-07 M/s Cobra Instalaciones Y Servicios SA, A-287, New Friends Colony, New Delhi – 110 065. PAN: AAACC3459Q Vs. ADIT, Circle-1(1), New Delhi. (Appellant) (Respondent) Assessee by : Shri Nirbhay Mehta, Advocate Revenue by : Ms Harpreet Kaur Hansra, Sr. DR Date of Hearing : 23.05.2025 Date of Pronouncement : 29.05.2025 ORDER PER ANUBHAV SHARMA, JM: The application in hand has been filed u/s 254(2) of the Income-tax Act, 1961 for rectification of the order dated 13.02.2023. 2. Heard both the sides. The ld. AR has taken us through the records and it transpires that vide common order dated 13.02.2023 for AYs 2005-06 and 2006- 07, the appeals were disposed. In both the years, the assessee had challenged the disallowance of engineering expenses. However, the disallowance of MA No.237/Del/2023 2 engineering expenses by applying the provisions of section 40(a)(i) was not pressed for both the assessment years and the only issue contested before the Bench was with regard to the disallowance of engineering expenses paid by the assessee to its head office by doubting the business exigency. The Bench while passing the order dated 13.02.2023 allowed ground No.3 in ITA No.6601/Del/2013 for AY 2005-06 and also allowed the appeal. While observed that with regard to AY 2006-07 there is no specific ground challenging the disallowance of engineering expenses paid by the assessee to its head office doubting business exigency and accordingly, the same was dismissed. 3. The ld. AR has admitted that the ground in AY 2006-07 was not happily worded giving an impression that specific ground with regard to disallowance of engineering expenses had not been raised. It is submitted that this is so because of the fact that assessment order for AY 2006-07 also made a consolidated disallowance of Rs.3,42,24,888/- which included the disallowance of engineering expenses aggregating to Rs.11,12,13,111/- u/s 40(a)(i) on account of non-deduction of TDS and rs.2,31,03,577/- on account of disallowance of engineering expenses by holding that business expediency is not established. Thus, by consolidating the ground, the entire disallowance of engineering expenses aggregating to Rs.3,42,24,888/- was challenged. MA No.237/Del/2023 3 4. The ld. DR could not dispute these facts. It appears that due to aforesaid reasons the bench had concluded that as there is no specific ground in ITA No.6602/Del/2013, the same is dismissed. However, the findings in ITA No.6601/Del/2013 for AY 2005-06 should have mutatis mutandis made applicable for AY 2006-07 also. This error requires rectification. 5. Accordingly, Para 14 of the order dated 13.02.2023 shall be read as follows:- “14. Therefore, the appeal ITA No.6601/Del/2013 is allowed partly and the findings of the same shall be mutatis mutandis applied to ITA No.6602/Del/2013 which also stands allowed partly.” 6. In the aforesaid terms, the application in hand is allowed. Order pronounced in the open court on 29.05.2025. Sd/- Sd/- (S. RIFAUR RAHMAN) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 29th May, 2025. dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi "