MAINLAND ESTATE (INDIA) PVT. LTD.,DELHI vs. DCIT, CIRCLE- 16(1), NEW DELHI

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ITA 4085/DEL/2018Status: DisposedITAT Delhi05 November 2018AY 2014-153 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that a similar disallowance for a prior assessment year was partly allowed by the predecessor CIT(A). Therefore, the Tribunal set aside the issue to the CIT(A) to decide it afresh in light of the previous year's order.

What were the facts?

The assessee claimed business expenses to maintain its corporate structure. The AO disallowed these expenses, stating it would result in double deduction as standard deduction was already allowed. The CIT(A) confirmed this disallowance.

What were the issues?

Whether expenses incurred to maintain corporate structure are allowable business expenses, and if a CIT(A) is bound by the decision of a predecessor on similar facts for a different assessment year.

Which sections of the Income-tax Act were involved?

Section 24(a)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ : NEW DELHI

Before: SHRI H.S. SIDHU

The Assessee has filed the Appeal against the Order dated 27.2.2018 of the Ld. CIT(A)-15, New Delhi pertaining to assessment year 2014-15 on the following grounds:- 1.) That on fact and in law, the Ld. CIT(A) erred in law in confirming the disallowance of Rs. 4,69,740/- made by the AO being minimum business expenses incurred under various heads of account to maintain the corporate structure on the ground that the same will result in double deduction, as appellant has already been allowed standard deduction u/s. 24(a) of the Act. 2.) That the Ld. CIT(A) erred in law in not following the findings recorded by the predecessor CIT(A) while disposing of the appeal for the AY 2011-12 in the case of appellant, wherein relief was allowed on similar additions on identical facts. 3.) That the appellant craves, leave to add, alter, amend, substitute, forgo, any or all the grounds of appeal before or at the time of hearing.

2.

The facts narrated by the revenue authorities are not disputed by both the parties, hence, the same are not repeated here for the sake of convenience.

3.

At the time of hearing, Ld. Counsel for the assessee has stated that exactly similar disallowance was made by the Revenue authority for assessment year 2011-12 which has been later allowed in the appeal filed before the Ld. CIT(A) vide his impugned order dated 4.12.2015 for assessment year 2011-12. But in the present case i.e. assessment year 2014-15, the Ld. CIT(A) has not followed the order of his predecessor and confirmed the addition in dispute. He also filed the copy of the order of the First Appellate Authority (Supra). He also draw my attention towards page no. 6 of the impugned order and stated that assessee has brought to the notice of the Ld. CIT(A) by filing the written submissions before him. The Ld. CIT(A) has not property considered the same and wrongly upheld the addition in dispute.

4.

On the other hand, Ld. DR has not raised objection to the request of the Assessee.

5.

I have heard both the parties and perused the records, specially the impugned order, I am of the view that Ld. CIT(A) has reproduced the written submissions on the issue in dispute in the impugned order at page no. 6 in which the assessee has stated that similar issue was also raised in the assessment proceedings u/s. 143(3) of the Act for the assessment year 2011-12 wherein, the AO had also disallowed the expenses which were incurred to maintain the corporate structure. On appeal, Ld. CIT(A)-19, had partly allowed the appeal vide para no. 4.2 at page no. 9 has given his finding which is not satisfactory. Therefore, in the interest of justice, I set aside the issue in dispute to the file of the Ld. CIT(A) to decide the same, in view of the finding recorded by his predecessor in the assessment year 2011-12 vide order dated 04.12.2015 and decide the issues in dispute accordingly, after giving adequate opportunity of being heard to the assessee. 6. In the result, Assessee’s appeal is allowed for statistical purposes. Order pronounced on 05-11-2018.

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