BAR CHEM,NEW DELHI vs. ACIT, CIRCLE-54(1), NEW DELHI

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ITA 2371/DEL/2019Status: DisposedITAT Delhi31 October 2022AY 2015-163 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal, following a coordinate bench's decision for a prior year, restricted the disallowance of the disputed expenses to 10% of the total expenditure. This was done in the absence of new material or changes in the business or expenditure pattern.

What were the facts?

The assessee appealed against the disallowance of various business expenses by the CIT(A) for multiple assessment years. The Assessing Officer had disallowed a higher percentage, which was then restricted by the CIT(A).

What were the issues?

The primary issue was the extent of disallowance of various business-related expenses claimed by the assessee, which were deemed not fully expedient by the revenue authorities.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI

Before: Sh. Kul BharatDr. B. R. R. Kumar

Hearing: 26.10Pronounced: 31.10.2022

Heard together (3 matters)

ITA No. 2369/Del/2019
ITA No. 2370/Del/2019
ITA No. 2371/Del/2019

Read from the judgment's own cause title. This page is filed under one of them.

Per Dr. B. R. R. Kumar, Accountant Member:

1.

The present appeals have been filed by the assessee against the orders of ld. CIT(A)-18, New Delhi dated 18.01.2019 and 31.01.2019.

2.

In following grounds have been raised by the assessee:

“1. On the facts and in the circumstances of the case and in law the Commissioner of Income-tax (Appeals) erred in disallowing Annual Maintenance Charges, Housekeeping charges upto 1NR 7,05,504/- without appreciating the fact that these are fully business expedient.

2. On the facts and in the circumstances of the case and in law the Commissioner of Income-tax (Appeals) erred in disallowing Audit fees, Computerization charges and Insurance expenses upto INR 57,637/- without appreciating the fact that these are fully business expedient.

3. On the facts and in the circumstances of the case and in law the Commissioner of Income-tax (Appeals) erred in disallowing Rate & Taxes upto INR 1,45,600/- without appreciating the fact that these are fully business expedient.

4. On the facts and in the circumstances of the case and in law the Commissioner of Income-tax (Appeals) erred in disallowing various other expenses (Medical Expenses, Postage & Telegram, Printing & Stationery, Salary & wages. Staff Welfare, Telephone expenses, Office Expenses, Misc. Expenses upto INR 6,64,033/-without appreciating the fact that these are fully business expedient.

5. On the facts and in the circumstances of the case and in law the Commissioner of Income-tax (Appeals) erred in disallowing vehicle and various other expenses (Car & Motorcycle expenses, Conveyance, Gardening expenses, Diwali expenses, Legal & Prof charges, travelling expenses upto INR 2,25,269/- without appreciating the fact that these are fully business expedient.”

3.

In following grounds have been raised by the assessee:

1. On the facts and in the circumstances of the case and in law the Commissioner of Income-tax (Appeals) erred in disallowing various expenses (Car & Motorcycle, Computerization, Conveyance, Medical Expenses, Postage & Courier, Printing & Stationery, Salary & wages, Staff Welfare, Telephone expenses) upto INR 9,42,661/- without appreciating the fact that these are fully business expedient.

4.

In , following grounds have been raised by the assessee:

1. On the facts and in the circumstances of the case and in law the Commissioner of Income-tax (Appeals) erred in disallowing various expenses (Car & Motorcycle, Computerization, Conveyance, Medical Expenses, Postage & Courier, Printing & Stationery, Salary & wages, Staff Welfare, Telephone expenses) upto INR 10,39,833/- without appreciating the fact that these are fully business expedient.

5.

Heard the arguments of both the parties and perused the material available on record.

6.

The grounds pertains to disallowance on account of annual maintenance charges, housing keeping charges, computerization charges, printing & stationary, postage & telegram, motorcycle expenses, conveyance, gardening expenses, and Diwali expenses etc. We find that this issue is repetitive in nature over a period of four years. The Assessing Officer disallowed the amounts varying from 80% to 50% whereas the ld. CIT(A) restricted the same from 30% to 50% on different expenditures. The Tribunal having examined the entire affairs of the assessee for the A.Y. 2012-13 in held that ends of natural justice would be met by restricting the disallowance to 10% of the expenditure. In the absence of any new material before us and change of business or the expenditure pattern, following the order of the Co-ordinate Bench of Tribunal, we hereby restrict the disallowance to 10% for the appeals before us.

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