PR. COMMISSIONER OF INCOME TAX-6, NEW DELHI vs. N.S.R. FARMS PVT. LTD.

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ITA/556/2017HC DelhiDLHC01282538201714 March 2018Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE A. K. CHAWLA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arises from the ITAT's order. The Court found that the findings of both the CIT(A) and the ITAT were pure factual findings. The CIT(A) had considered the materials on record and concluded that the assessee had reported land trading and related transactions, justifying the expenditure. The ITAT concurred with this view. Since the appeal raised only factual disputes, and not legal ones, the High Court dismissed the appeal. The operative direction was the dismissal of the Revenue's appeal.

What were the facts?

The Revenue, represented by the Pr. Commissioner of Income Tax-6, New Delhi, appealed the Income Tax Appellate Tribunal's (ITAT) decision. The ITAT had allowed the assessee, N.S.R. Farms Pvt. Ltd., a claim for business expenditure amounting to ₹37,47,393/-. The assessee was involved in land-related transactions during the assessment year(s) in question. The Assessing Officer (AO) disallowed this expenditure, stating the assessee reported no business activity. However, the Commissioner of Income Tax (Appeals) [CIT(A)] found that the assessee had reported land trading and related transactions, deeming the AO's findings unjustified. The ITAT concurred with the CIT(A). The High Court was considering the Revenue's appeal against the ITAT's order.

What were the issues?

1. Whether the ITAT erred in allowing the assessee's claim of business expenditure of ₹37,47,393/-, when the Assessing Officer had disallowed it on the grounds of no reported business activity during the relevant period? (Question of law and fact, concerning the allowability of expenditure under the Income Tax Act, 1961). Assessee's Contention: The assessee argued that the CIT(A) and ITAT correctly considered the materials on record, which indicated that the assessee had indeed reported certain transactions such as trading of land and other related activities. Therefore, the disallowance by the AO was not justified. Revenue's Contention: The Revenue's appeal implicitly challenges the findings of the lower appellate authorities, arguing that the expenditure should not have been allowed as business expenditure. The specific grounds of the Revenue's challenge are not detailed in the judgment beyond the fact that it questions the ITAT's decision.

AI-generated summary — verify with the full judgment below

$~15 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 556/2017

PR. COMMISSIONER OF INCOME TAX-6, NEW DELHI

..... Appellant Through Mr. Asheesh Jain, Sr. Standing Counsel with Mr. Shahrukh Ejaz, Adv.

versus

N.S.R. FARMS PVT. LTD.

..... Respondent Through Mr. Gautam jain, Mr.P.K. Kamal and Ms. Madhu Jain, Advs.

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA

O R D E R %

14.03.2018

The Revenue’s appeal questions the decision of the ITAT which allowed the assessee’s claim of business expenditure to the tune of `37,47,393/-.

The assessee was at the relevant time engaged in land related transactions and had claimed the amount in question as business expenditure. The Assessing Officer (AO) disallowed the amounts holding that the assessee did not report any business activity at the relevant period. However, the CIT(A) after considering the materials on record was of the opinion that since the assessee had reported certain transactions such as trading of land and other related transactions, the AO’s findings were not justified. The ITAT

concurred with the CIT(A) findings.

This Court is of the opinion that no substantial question of law arises as findings rendered by both the lower appellate authorities were pure factual findings. The appeal is accordingly dismissed.

S. RAVINDRA BHAT, J

A. K. CHAWLA, J MARCH 14, 2018 rc

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