PRINCIPAL COMMISSIONER OF vs. M/S UTECH DEVELOPERS LTD.

ITA 180/2022 Page 1 of 3 $~A-1826 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 180/2022 & CM APPL.27816/2022 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) - 3 ..... Appellant Through: Mr.Ajit Sharma, Sr.Standing Counsel. versus M/S UTECH DEVELOPERS LTD. ..... Respondent Through: Ms.Kavita Jha, Advocate with Mr.Udit Naresh and Mr.Himanshu Aggarwal, Advocates. % Date of Decision: 07th July, 2022 CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA J U D G M E N T MANMOHAN, J (Oral): 1. Present Income Tax Appeal has been filed challenging the Order dated 30th June, 2021 passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITA No. 3736/Del/2016 for the Assessment Year 2009-10. 2. Learned counsel for the Appellant states that the ITAT has erred in deleting the additions made by the Assessing Officer on account of disallowance of travel expenses without considering that the assessee had failed to explain the purpose of the journey and that it was ‘wholly and exclusively’ for business. This is a digitally signed Judgement. NEUTRAL CITATION NO: 2022/DHC/002486

ITA 180/2022 Page 2 of 3 3. He also states that the ITAT has erred in deleting the additions made by the Assessing officer on account of disallowance of loan interest expenses, without considering that there was no nexus between the utilization of borrowed funds and business activity of the assessee. In support of his submission, he relies on Section 36(1)(iii) of the Income Tax Act, 1961 (‘the Act’). 4. However, a perusal of the paperbook reveals that both the CIT(A) as well as ITAT have given concurrent findings of fact that in the year under consideration, the assessee had provided the details vis-à-vis name of its employees as well as justification/ purpose of travel. It was further held by both the authorities below that the assessing officer arbitrarily made an addition on an estimated basis @ of 20% of the total travelling expenditure which includes domestic as well as foreign travel and conveyance of the employees. Both the CIT (A) and ITAT emphasised that the assessing officer had failed to provide any cogent reasoning or working, based on which such disallowances were made. 5. Further, both the CIT(A) as well as ITAT have held that the assessee had carried out its business of real estate and infrastructure development during the year under consideration as it had undertaken more than nine projects and had carried inventory of Rs.53.87 crores of traded goods in the form of apartments which were ready for sale and which were sold in the subsequent years. The two authorities below have also found that the respondent-assessee had participated in joint venture projects outside India in consonance with its Memorandum of Association and there was clear connection between the money borrowed and its utilization for the purposes of business of real estate and infrastructural development. Both the appellate This is a digitally signed Judgement. NEUTRAL CITATION NO: 2022/DHC/002486