DCIT, NEW DELHI vs. M/S. WAL-MART PVT. LTD., NEW DELHI

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ITA 5208/DEL/2014Status: DisposedITAT Delhi19 July 2018AY 2010-114 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal followed a co-ordinate bench's decision on identical facts for a previous assessment year. The Tribunal held that disallowing a percentage of operational expenses without specific findings or justification is improper, especially when financial statements are maintained.

What were the facts?

The Revenue appealed against the CIT(A)'s deletion of an addition of Rs. 7,72,46,835/-, which was 10% of operational expenses disallowed by the Assessing Officer. The assessee had failed to furnish details requested by the Assessing Officer.

What were the issues?

Whether the Assessing Officer was justified in disallowing a percentage of operational expenses without specific findings or justification, and whether the CIT(A) erred in deleting such an addition.

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI ‘D’ BENCH,

Before: SHRI N.K. BILLAIYA, & SHRI KULDIP SINGH

For Appellant: Shri K.M. Gupta, Adv
Hearing: 19.07.2018Pronounced: 19.07.2018

PER N.K. BILLAIYA, ACCOUNTANT MEMBER,

1.

This appeal by the Revenue is preferred against the order of the Commissioner of Income Tax (Appeals)-XXXIII, New Delhi dated 02.08.2013 pertaining to A.Y 2010-11.

2.

The only grievance of the Revenue is that the CIT(A) erred in deleting the addition of Rs. 7,72,46,835/-, being 10% of operational expenses disallowed, when despite ample opportunities, the assessee had failed to furnish details called for by the Assessing Officer.

3.

At the very outset, the ld. AR pointed out that on identical facts in assessment year 2009-10, the matter had travelled upto the Tribunal and the Tribunal vide order dated 07.01.2016 has confirmed the deletion by the ld. CIT(A). The ld. counsel supplied copy of the order of the Tribunal.

5.

Per contra, the ld. DR could not bring any distinguishing decision in favour of the Revenue.

6.

We have carefully considered the orders of the authorities below. We find force in the contention of the ld. Counsel. The co-ordinate bench of the Tribunal in had occasion to consider a similar ground of appeal and held as under:

“We have perused all the records and heard both the parties. It is pertinent to note that the expenditure were normal operating expenses and there is no basis for treating a certain percentage of the said expenses as capital expenditure as there is no specific finding or justification given by the Assessing Officer to that effect. Merely estimating the same is not proper on part of the Assessing Officer. The assessee maintained its financial statements and it was properly taken cognizance by the CIT(A) and overlooked by the Assessing Officer. Therefore, the ld. CIT(A) has rightly allowed the appeal of the assessee.”

7.

Respectfully following the findings of the co-ordinate bench, we decline to interfere.

8.

In the result, the appeal of the Revenue in is dismissed.

The order is pronounced in the open court on 19.07.2018.

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