DCIT, CIRCLE- 27(2), NEW DELHI vs. WHARTON ENGINEERS & DEVELOPERS PVT. LTD. (EARLIER WILFUL FINANCE INVESTMENT CO. PVT.), NEW DELHI

ITA 7841/DEL/2018Status: DisposedITAT Delhi27 November 2024AY 2014-15Bench: the Ld CIT(A) who vide his order dated 24-09-2018 has allowed the appeal against which the Revenue is in appeal before us.5. The Ld.DR das submitted that the assessee company has received a dividend of Rs 272000000/-this income was taxable @15%u/s 115BBD of the Act without any deduction because the assessee has reflected the income from other sources. He has strongly supported the order of the AO.13 pages
AI SummaryDismissed

What did the Tribunal hold?

The ITAT dismissed the revenue's appeal, affirming the CIT(A)'s decision to delete the major portion of the disallowance of business expenses. The tribunal found that the AO's disallowance was based on mere suspicion and conjectures without identifying specific non-business expenses, and that the expenses were incurred for business purposes. However, the ITAT confirmed the CIT(A)'s upholding of a minor disallowance of Rs. 84,922/- related to house property maintenance charges, as it was not a business expense.

What were the facts?

The revenue filed an appeal against the CIT(A)'s order which deleted a major disallowance of Rs. 2,70,64,096/- made by the AO under section 37 for business expenses for A.Y. 2014-15. The AO had questioned the business expenses due to a significant disparity between total income and operational revenue, while the assessee claimed the expenses were genuinely incurred for business, despite a lull in the business year. The assessee also received substantial dividend income taxable under section 115BBD.

What were the issues?

Whether the CIT(A) erred in deleting the disallowance of business expenses under section 37 made by the AO and whether the apportionment of business expenses by the AO was justified.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 37,Section 143(2),Section 142(1),Section 115BBD,Section 115O

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Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI

Before: SH. PRADIP KUMAR KEDIA & SH. SUDHIR KUMAR

For Respondent: CA Sh. V.K. Garg, CA
Hearing: 19/09/2024

PER SUDHIR KUMAR, JM: This appeal by the revenueis directed against the order of the Commissioner of Income Tax (Appeals)/NFAC, Delhi [hereinafter referred to as “CIT(A)”] vide order dated 24.09.2018 pertaining to A.Y. 2014-15 pertaining to arises out of the assessment order dated13.12.2016 under section 143(3)of the Income Tax Act 1961 [hereinafter referred as ‘the Act’].

2.

The revenue has raised following grounds of appeal :-

1.

"Whether ton the facts and circumstances of the case the CIT(A) has erred in deleting the addition of Rs. 2,70,64,096/- made by the AO by making disallowance u/s 37 of the Income Tax Act, 1961, without appreciating th

The order continues below.

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