HUF INDIA PRIVATE LIMITED,PUNE vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE - 9, PUNE

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ITA 2674/PUN/2017Status: DisposedITAT Pune15 November 2019AY 2011-125 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the deduction for similar amounts was consistently allowed in the two preceding assessment years, the principle of consistency should be followed. Therefore, the assessee is entitled to the deduction in the current year.

What were the facts?

The assessee claimed a deduction of Rs. 9.00 lakh as pre-operative expenses under Section 35D. The Assessing Officer added this amount back, treating it as pre-operative expenses that were not eligible for deduction. This addition was upheld by the CIT(A).

What were the issues?

Whether the assessee is entitled to a deduction for pre-operative expenses under Section 35D, following the principle of consistency from previous assessment years.

Which sections of the Income-tax Act were involved?

Section 35D

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE

Before: SHRI R.S. SYAL

For Appellant: Smt. Deepa Khare
For Respondent: Shri Prashant Mahajan

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT �ी आर. एस.�ाल, उपा�� के सम� आयकर अपील सं. / ITA No. 2674/PUN/2017 िनधा�रण वष� / Assessment Year : 2011-12

M/s. HUF India Pvt. Ltd., Vs. ACIT, Circle-9, Gat No.304, Nanekarwadi, Pune Chakan, Tal. Khed, Pune – 410501 Maharashtra PAN : AABCH9173K (Appellant) (Respondent)

Appellant by Smt. Deepa Khare Respondent by Shri Prashant Mahajan Date of hearing 14-11-2019 Date of pronouncement 15-11-2019 आदेश / ORDER PER R.S.SYAL, VP :

This appeal by the assessee arises out of the order passed by the Commissioner of Income-tax (Appeals)-6, Pune on 03-07-2017 in relation to the assessment year 2011-12.

2.

The only assail herein is to the confirmation of addition of Rs.9.00 lakh made by the Assessing Officer (AO) u/s.35D of

2 ITA No.2674/PUN/2017 M/s. HUF India Pvt. Ltd.,

the Income-tax Act, 1961 (hereinafter also called `the Act’) by

treating the amount as pre-operative expenses.

3.

Succinctly, the facts of the case are that the assessee

claimed deduction of Rs.9.00 lakh towards pre-operative

expenses u/s.35D of the Act. The AO noticed that the assessee

had incurred expenditure of Rs.98,11,558/- as pre-operative

expenses during the financial year relevant to the assessment

year 2009-10, out of which a sum of Rs.45.00 lakh was treated as qualifying amount. 1/5th of such qualifying amount, namely,

Rs.9.00 lakh was claimed as deduction u/s.35D of the Act for

and from the A.Y. 2009-10 including the year under

consideration. On examination of the details of such amount of

Rs.98.00 lakh, the AO came to hold that the sum of Rs.9.00

lakh was liable to be added. He, therefore, made the

disallowance, which came to be sustained in the first appeal.

The assessee is aggrieved by such confirmation of the addition.

4.

I have heard both the sides and gone through the relevant

material on record. In the course of an earlier hearing of this

appeal, the ld. DR was required to submit a report on the

granting or otherwise of deduction of such expenses of Rs.9.00

3 ITA No.2674/PUN/2017 M/s. HUF India Pvt. Ltd.,

lakh in the earlier years. A copy of the report from the AO has

been placed on record by the ld. DR. As per this report, a

deduction of Rs.9.00 lakh was claimed for the first time in the

return for the A.Y. 2009-10 which was not granted, but the ld.

CIT(A) accepted the assessee’s claim and the Revenue’s appeal

has been dismissed, albeit on low tax effect. No assessment

was taken up u/s. 143(3) of the Act for the A.Y. 2010-11,

meaning thereby that the deduction got allowed. From the

above report of the AO, it is ostensible that the assessee has

been consistently allowed deduction of Rs.9.00 lakh in the

assessments for the A.Ys 2009-10 and 2010-11. The

assessment year 2011-12, under consideration, is a consecutive 3rd year in line. In view of the fact that the deduction for

similar amounts has been allowed in the immediately two

preceding assessment years, following the principle of

consistency, I hold the assessee to be entitled to deduction of

Rs.9.00 lakh in the year under consideration as well. The

impugned order is overturned on this score and the deduction of

Rs.9.00 lakh is granted.

4 ITA No.2674/PUN/2017 M/s. HUF India Pvt. Ltd.,

5.

In the result, the appeal is allowed.

Order pronounced in the Open Court on 15th November, 2019.

Sd/- (R.S.SYAL) उपा�य� उपा�य�/ VICE PRESIDENT उपा�य� उपा�य�

पुणे Pune; �दनांक Dated : 15th November, 2019 सतीश आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत / Copy of the Order is forwarded to : क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत आदेश आदेश आदेश अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. आयकर आयु�(अपील) / 3. The CIT (Appeals)-6, Pune 4. The Pr.CIT- 5, Pune 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “SMC” / DR ‘SMC’, ITAT, Pune; गाड� फाईल / Guard file. 6. // True copy // आदेशानुसार आदेशानुसार/ BY ORDER, आदेशानुसार आदेशानुसार

// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune

ITA No.2674/PUN/2017 M/s. HUF India Pvt. Ltd.,

Date 1. Draft dictated on 14-11-2019 Sr.PS 2. Draft placed before author 14-11-2019 Sr.PS 3. Draft proposed & placed -- JM before the second member 4. Draft discussed/approved -- JM by Second Member. 5. Approved Draft comes to Sr.PS the Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *

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