SAMTEL HAL DISPLAY SYSTEMS LTD.,NEW DELHI vs. ITO, NEW DELHI

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ITA 6555/DEL/2013Status: DisposedITAT Delhi05 May 2016AY 2009-103 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Assessing Officer and the CIT(A) erred in disallowing an amount that was never claimed by the assessee as a revenue expenditure. The disallowance was deleted.

What were the facts?

The assessee filed a 'nil' return of income as it had not commenced business and had capitalized its preoperative expenditure. No expenditure was claimed as revenue expenditure.

What were the issues?

Whether the disallowance of expenditure claimed as revenue expenditure is valid when no such expenditure was claimed by the assessee.

AI-generated summary — verify with the full judgment below

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

Before: SHRI H.S.SIDHU & SHRI J. SUDHAKAR REDDY

For Appellant: Shri D.C. Garg, C.A

ORDER PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER

This is an appeal filed by the Assessee directed against the order dated 7.10.2013 of Ld.CIT(A)-X, New Delhi pertaining to the Assessment Year (hereinafter referred to as the A.Y.) 2009-10 on the following grounds . “1. That the Ld.CIT(A)-X, New Delhi, has erred in law as well as on facts and in circumstances of the case in upholding the addition of Rs.17,64,911/- made by the A.O. without assigning any reason.

2. The appellant craves leave to add, amend or vary from the aforesaid grounds of appeal at or before the time of hearing.”

2.

We have heard Shri D.C.Garg, the Ld.Counsel for the assessee and Ms.Rashmita Jha, Ld.Sr.D.R. on behalf of the Revenue.

Samtel HAL Display Systems Ltd., New Delhi 3. After hearing rival contentions we find that the assessee has filed a ‘nil’ return of income on 30.9.2009. During the year the assessee has not drawn up a Profit & Loss account as it has not commenced business till 31.3.2009. The expenditure incurred was accounted as preoperative expenditure and was capitalized. When no expenditure whatsoever was claimed, the question of making a disallowance by the Assessing Officer (hereinafter referred to as the AO) does not arise. The A.O. as well as the Ld.CIT(A), have in our view committed an error in disallowing an amount which was never claimed by the assessee as a revenue expenditure. Thus we allow this ground of the assessee and delete the disallowance made.

4.

In the result the appeal of the assessee is allowed.

Order pronounced in the Open Court on 05th May, 2016.

Sd/- Sd/- (H.S. SIDHU) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: the 05th May, 2016 *manga

Samtel HAL Display Systems Ltd., New Delhi Copy of the Order forwarded to:

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