ASST. COMMISSIONER OF INCOME TAX , C.R. BUILDING ITO vs. INTERNATIONAL TRACTORS LTD. , KARKARDOOMA COMMUNITY CENTER

The Revenue vehemently argues that this is very much a recurring issue as per the learned CIT(A)/NFAC detailed discussion going by the Assessing Officer’s assessment order passed in the assessment year 2016-17. The assessee, at this stage, takes us to the assessment order dated 28.12.2018 complied at pages 7 806 to 817 of the paper book wherein no such deduction had been disallowed in the said “initial assessment year” as per the computation therein. This clinching factual position has gone unrebutted from the Revenue side. We conclude in this factual backdrop that the impugned section 80JJAA deduction disallowance made in the assessee’s case does not deserve to be concurred with. Deleted in very terms therefore. This assessee’s appeal ITA No. 421/Del/2024 succeeds therefore.

We now advert to the Revenue’s cross appeal ITA No. 442/Del/2024 raising its sole substantive ground seeking to revive the assessee’s travelling expenses of staff and directors of Rs. 7,23,86,167/- made in the assessment order and deleted in the lower appellate discussion. Suffice to say, there could hardly be any dispute that the learned Assessing Officer had invoked 20% ad hoc disallowance thereof. And that the learned CIT(A)/NFAC holds that such an action could not be upheld for want of rejection of books and specific defects in the assessee’s claim and explanation. We are of the considered view that there is hardly any reason for us to interfere with the learned CIT(A)/NFAC findings in principle. The fact, however remains that possibility of some reconciliation and verification of the corresponding bills and vouchers viz-a-viz the specific business purposes could not be altogether ruled out as well. We deem it appropriate in this factual backdrop that a lumpsump disallowance of Rs. 10 lakhs only in the assessee’s hands would be just and proper with a rider that the same shall not treated as precedent. Learned CIT(A) detailed discussion is hereby upheld to the extent of Rs. 7,13,86,167/- in other words. Necessary computation shall follow. This Revenue’s cross appeal ITA No. 442/Del/2024 is partly allowed.

We next notice with the able assistance coming from both the parties that the Revenue’s latter appeal ITA No. 549/Del2024 in assessment year 2020-21 is stated to be involving tax effect of Rs. 45,54,484/- i.e., less than the prescribed 8 tax effect of Rs. 60 lakhs in the CBDT’s landmark circular no. 09/2024. This is further coupled with the fact that it seeks to disallow the assessee’s section 80JJAA deduction claim which already stands accepted in assessment year 2018- 19 in our preceding detailed discussion. Rejected in the very twin terms therefore.

To sum up, this assessee’s appeal ITA No. 421/Del/2024 is allowed and the Revenue’s cross appeal ITA No. 442/Del/2024 is partly allowed. The Revenue’s latter appeal ITA No. 549/Del/2024 is dismissed. A copy of this common order be placed in the respective case files. Order pronounced in the open court on 15.10.2026.