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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: HON’BLE SHRI MAHAVIR SINGH & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2015-16 arises out of the order of Learned Commissioner of Income Tax (Appeals)-3, Chennai [CIT(A)] dated 26-09-2019 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s.143(3) of the Act on 15-12-2018. The grounds taken by the assessee are as under:
1. 1. The impugned order of the Commissioner of Income Tax (Appeals), Chennai 600034 is contrary to law, weight of evidence and probabilities of the case.
2. The order of the Commissioner of Income Tax- Appeals confirming the order of the Assessing Officer in restricting the deferred revenue expenditure to Rs.25,43,954/- against the claim of Rs.63,44,655/- is unlawful and not justified.
2 - 3. The expenses incurred in the earlier years were all genuine and for the promotion of the business of the company.
4. When the company sold its shares in its wholly owned subsidiary company for a good profit, it wanted to claim these expenses against the same.
The company's local business was doing badly and it closed its business in the Financial Year 2015-16 necessitating it to claim the maximum of deferred revenue expenditure. As is evident, the assessee is aggrieved by restriction of deferred revenue expenditure. Having heard rival submissions and after perusal of case records, the appeal is disposed-off as under.
During assessment proceedings, it transpired that the assessee wrote-off an amount of Rs.96.67 Lacs out of deferred revenue expenditure of Rs.127.19 Lacs as standing as on 30.03.2014. Out of Rs.96.67 Lacs, an amount of Rs.33.22 Lacs was claimed as marketing expenses which is not subject matter of this appeal. The remaining amount of Rs.63.44 Lacs was claimed as amount written-off. However, Ld. AO held that deferred revenue expenses could be written-off only up-to 20% and therefore, the claim was restricted to 20% which resulted into disallowance of Rs.38 Lacs. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us.
It is admitted position that the assessee is claiming deferred revenue expenditure in earlier years in staggered manner and following the same methodology, the assessee is entitled to claim 20% of the same in this year also. Since Ld. AO has restricted the claim to that extent, no interference is required in the orders of lower authorities.
The appeal stand dismissed.
Order pronounced on 03rd August, 2022.