TECHNO TREXIM (INDIA) PRIVATE LIMITED,NEW DELHI vs. ACIT, CIRCLE- 25(1), DELHI, DELHI

ITA 468/DEL/2024Status: DisposedITAT Delhi29 January 2026AY 2016-1739 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal decided on the commission expenses issue by upholding the deletion made by the CIT(A). The Tribunal agreed that the commission paid for arranging a new tenant was an expenditure incurred for the purpose of business and was allowable in the year it was incurred. The Tribunal found the assessee's argument that identifying a new tenant in advance to avoid a gap in rental income was a normal business practice to be logical. It also noted that the possession of the property was handed over during the relevant financial year, and the rent-free period was a standard business practice. The Tribunal distinguished the facts from the case of Taparia Tools Ltd., emphasizing that ordinary revenue expenditure incurred exclusively for business purposes should be allowed in the year of incurrence. Regarding the claim of long-term capital loss on the sale of properties, the Tribunal dismissed the assessee's grounds. The Tribunal observed that the initial agreement to sell was cancelled, and subsequent MOUs were not supported by legally enforceable documents. The Tribunal noted that funds received were recorded as advances against property in the balance sheet, indicating the original agreement was not acted upon. Therefore, without legally enforceable documents, the assessee's claim of holding rights over the property could not be substantiated, and the findings of the lower authorities were upheld. The issues concerning interest expenditure and housekeeping/security expenses were not explicitly decided in the provided excerpt, but the overall outcome suggests they were also decided in favor of the assessee based on the final order.

What were the facts?

The assessee, Techno Trexim (India) Private Limited, and the Revenue have filed cross-appeals against the order of the CIT(A) for Assessment Year 2016-17. The Revenue's appeal challenges the deletion of additions made by the Assessing Officer (AO) concerning commission expenses (Rs. 8,54,250/-), interest expenditure (Rs. 6,24,72,099/-), and housekeeping and security expenses (Rs. 15,65,959/-). The AO disallowed commission expenses, arguing that although incurred for business, the corresponding income would accrue in the subsequent year, citing the Tapariya Tools Ltd. case. The assessee contended that the commission was for arranging a new tenant, possession was handed over in the relevant FY, and the rent-free period was for making the premises operational. The assessee also argued that the Tapariya Tools Ltd. case was distinguishable. The assessee's appeal, conversely, dealt with the claim of long-term capital loss on the sale of two properties, which was denied by the AO and dismissed by the CIT(A).

What were the issues?

1. Whether, on the facts and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 8,54,250/- on account of commission expenses, when the AO disallowed it on the grounds that the expense should be accounted for in the succeeding year as the income accrues later, relying on Section 37 of the Act and the case of Tapariya Tools Ltd. (Revenue's contention). The assessee argued that the expenditure was incurred wholly and exclusively for business purposes in the relevant year, and the cited case was distinguishable. 2. Whether, on the facts and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 6,24,72,099/- on account of interest expenditure (Revenue's contention). 3. Whether, on the facts and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 15,65,959/- on account of housekeeping and security expenses (Revenue's contention). 4. Whether, on the facts and in law, the assessee is entitled to claim long-term capital loss on the sale of properties, when the AO and CIT(A) denied it due to lack of genuine documentation and enforceability of agreements, relying on Section 54 of the Act (Assessee's contention). The Revenue argued that the documents were not genuine and not notarized, thus no sale occurred.

Which sections of the Income-tax Act were involved?

Section 37,Section 54

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Income Tax Appellate Tribunal, DELHI BENCHES ‘E’: NEW DELHI.

Before: SHRIS.RIFAUR RAHMAN & SHRI YOGESH KUMAR USS.

For Appellant: Shri I.P. Bansal, Advocate, Shri Vivek Bansal, Advocate
For Respondent: Shri Abhijeet Kumar, Sr.DR
Hearing: 09.01.2026

Heard together (2 matters)

ITA No.468/Del/2024
ITA No.582/Del/2024

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

PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER :

1.

The assessee and Revenue has filed cross appeal against the order of Learned Commissioner of Income Tax (Appeals)/National Faceless ITA No.582/Del/2024

Appeal Centre (NFAC), Delhi [“Ld. CIT(A)”, for short] dated 11.12.2023 for the Assessment Year 2016-17. First we take up Revenue’s appeal and the Revenue has taken the following grounds of appeal :-

"

1.

Whether on the facts and circumstances

The order continues below.

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