M/S. PIYUSH BUILDWELL INDIA LTD.,NEW DELHI vs. DCIT, FARIDABAD

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ITA 2735/DEL/2015Status: DisposedITAT Delhi15 March 2016AY 2007-084 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(A) had dismissed the appeal. However, considering the assessee's contention of an error in expense categorization, the Tribunal restored the matter to the AO for fresh adjudication.

What were the facts?

A search operation was conducted on the assessee company, and the AO made an addition of Rs. 3,93,972/- for repair and maintenance expenses. The AO disallowed the expenses as the assessee had not shown any building as an asset and did not provide purchase details.

What were the issues?

Whether the repair and maintenance expenses claimed by the assessee were genuine and adequately substantiated, considering the absence of building as a declared asset.

Which sections of the Income-tax Act were involved?

Section 133A,Section 153A

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Income Tax Appellate Tribunal, DELHI BENCH “H” NEW DELHI

For Appellant: Shri A.K. Mishra FCA
For Respondent: Shri V.R. Sonbhadra Sr. DR

This is assessee’s appeal against the CIT(A)’s order dated 31.03.2015 in appeal no. 101/57/IT(LDH)/CIT(A)(C)/GGN/2009-10, relating to A.Y. 2007-08.

2.

Brief facts of the case are that search and seizure operation was conducted at the Corporate/ Administrative office premises no. A-16/B-1, Mohan Cooperative Industrial Estate, Main Mathura Road, New Delhi of Piyush Group of Companies on 16.01.2008. Survey u/s 133A was also conducted in the premises of some of the assessee in the group simultaneously. The residential premies of Directors of Piyush Group were also searched on 16.01.2008. In response to notice u/s 153A the assessee company had filed return declaring an income of Rs. 2,39,946/-. The AO made addition of Rs. 3,93,972/- in respect of the expenses claimed by the assessee on account of repair and maintenance of building, observing that since the assessee had not shown any building during the previous year and assessee had also not furnished details of purchases of fixed assets including building during the year, the expenses did not appear to be genuine.

3. Ld. CIT(A) dismissed the assessee’s appeal.

4.

Being aggrieved, the assessee is in appeal before us and has taken following grounds of appeal:

“1. That the Worthy Commissioner of Income Tax (Appeals) has erred in confirming the order of the Assessing Officer thereby sustaining the addition of Rs. 3,93,972/ - as debited to profit and loss account under the head repair and maintenance.

2. That the Worthy CIT (A) has also erred in not considering the details of the various expenses in the shape of ledger copies as filed before her and not admitting the same for proper adjudication of the case.

3.

That all such ledger copies were \part of the audited books of accounts which were produced before her during the course of hearing and the same should have been considered in the view of the decision in the case of CIT Vs Mukta Metal Works, 336

ITR 555 (P&H) and in the case of Sh. Tek Ram Vs CIT as reported in 357 ITR 133 (SC). 4. That the learned CIT (A) have erred not appreciating the facts the addition of Rs.3, 93, 972/ - was made by the A.O. without observing principle of natural justice. 5. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.”

5. We have considered the submissions of both the parties. We find that ld.

CIT(A) has, inter alia, observed in para 5.1 as under:

"Coming to the addition of Rs.3,93,972/-, it is se-en that the said-amount debited in the P /L account under repair maintenance was disallowed by the AO in the absence of proper details and justification. Before me, assessee contended that the expenses were on various counts viz. office maintenance, house-keeping etc which had been inadvertently clubbed under one common head of repair and maintenance (building). This error was attributed to the auditor who prepared the balance-sheet consolidating various expense heads. However, it is evident from the impugned order that the AO had categorically asked to justify the claim of expenditure in the backdrop of the assessee had not declaring any building as its asset in the previous year and then no details of fixed assets including building were filed during the assessment proceeding.

6.

From the above observations it is evident that the main claim of assessee was that there was error in considering the head of expenses and, therefore, it would be in the interest of justice that the matter is restored back to the file of AO for deciding the issue de novo in accordance with law, after affording reasonable opportunity of being heard to the assessee. We order accordingly.

7.

In the result, assessee’s appeal is allowed for statistical purposes.

Order pronounced in open court on 15-03-2016.

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