C.H.L. (SOUTH) HOTELS LTD.,NEW DELHI vs. DCIT, NEW DELHI
What did the Tribunal hold?
The Tribunal held that the AO's orders were non-reasoned and lacked justification for rejecting the assessee's explanation. Therefore, the matter was set aside and remitted back to the AO for passing a reasoned order.
What were the facts?
The assessee claimed deduction for interest expense and other expenses. The Assessing Officer (AO) disallowed these expenses without providing any reasons. The CIT(A) affirmed these disallowances.
What were the issues?
Whether the disallowance of expenses by the AO without providing reasons is valid. Whether the CIT(A) erred in affirming such non-reasoned disallowances.
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCHES : SMC-I : NEW DELHI
Before: SHRI R.S. SYAL
ORDER This appeal by the assessee arises out of the order passed by the CIT(A) on 12.03.2015 in relation to the assessment year 2006-07.
The first ground is against the confirmation of disallowance of interest expense amounting to Rs. 9,05,461.
After considering the rival submissions and perusing the relevant material on record, it is noticed that the assessee tendered explanation in support of the claim for deduction, which has been reproduced on page 2 of the A.O. Without giving any reason whatsoever, the A.O. made disallowance, which came to be affirmed in the first appeal. The Ld. A.R. contended, and in my considered opinion rightly so, that the A.O. ought to have given reasons for rejecting the assessee’s explanation instead of making the an addition by way of a non- reasoned order. I therefore, set aside the impugned order on this score and remit the matter to the file of A.O. for passing a reasoned order on this issue after meeting with the objections raised by the assessee.
Second ground is against the confirmation of disallowance of expenses amounting to Rs. 1,36,199/-. The A.O. followed more or less the same course of action, as we have referred to hereinabove. Following the same view, we set aside the impugned order on this issue as well and direct A.O. to give reasons for making any disallowance, if warranted.
In the result the appeal is allowed for statistical purposes.
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