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31-10-2019,Vatika, Section 133(6), 35D, 251(2), 31(3), Tribunal Delhi

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1 week 4 days ago #11286 by amit
Section - 133(6), 35D, 251(2), 31(3)
Order Date - 31-10.2019
Favouring - Partly allowed for statistical purposes
Court - Tribunal Delhi
Appellant - Vatika Limited
Respondent - DCIT
Justice - N.K. BILLAIYA AM & KULDIP SINGH JM
Citation - 1119Taxpundit28
Appeal No. - ITA No.2489/Del./2014
Asstt. Year - 2009-10

Order

PER : KULDIP SINGH

Present cross appeals filed by the assessee as well as by the revenue are being disposed off by way of composite order to avoid repetition of discussion.

2. Appellant, M/s. Vatika Limited (hereinafter referred to as the ‘assessee’) by filing the present appeal sought to set aside the impugned order dated 27.03.2014 passed by the Commissioner of Income - tax (Appeals)-XXXI, New Delhi qua the assessment year 2009-10 on the grounds inter alia that :-

“1. That the learned CIT(A) has erred both on facts and in law in not only partially confirming the order of assessment but has further erred in enhan ing the income of the assessee company by Rs.2,69,66,400/-.

2. That the learn d CIT(A) has thus erred both on facts and in law in partially confirming the following disallowances made to the income returned by the learned DCIT, Central Circle -20, New Delhi:

(i) Rs.12,24,329/- out of a disallowance made of Rs.15 02,9771- on account of expenditure incurred in respect of commission and brokerage. The aforesaid disallowance has been made without appreciating that admittedly the assessee had not been granted a valid and proper opportunity by the DCIT and further the learned CIT(A) has erred in failing to appreciate, the burden which lay upon it stood discharged when, it filed necessary evidence in support of the claim that the aforesaid expenditure has genuinely been incurred for the purposes of business and thus there was no justification to uphold a disallowance of Rs.12,24,329/-. The findings that the assessee had failed to establish the nature of expenditure by producing sufficient evidences is completely misconceived.

(ii) Rs.14,38,050/- out of a disallowance made of Rs.1,19,94,194/-, under the head "commission and brokerage". The aforesaid disallowance effectively sustained by the CIT(A) is wholly erroneous and is by overlooking the documentary evidence that the assessee had genuinely incurred the entire expenditure for the purposes of its business. There was no valid justification to uphold the disallowance of the said expenditure.

(iii) Rs.14,38,050/-, out of the expenditure incurred under the head "advertisement and publicity" out of disallowance made (aggregating to Rs.1,19,94,194/-). The learned CIT(A) has failed to comprehend that the assessee had furnished necessary evidence in support that the expenditure had been incurred genuinely for the purposes of the business and the burden which lay upon it stood discharged. In fact the learned CIT(A) has failed to comprehend that, there was no adverse material on the basis of the said expenditure incurred could have been held as not a deductible expenditure. The aforesaid expenditure being business expenditure ought to have been held as allowable deduction.

(iv) Rs.5,96,175/-, out of a disallowance made of (Rs.4,11,814/- + Rs.7,60,73,615/- + Rs.75 85,28,462/-). The aforesaid 'addition' of Rs.5,96,175/- ha been sustained on completely misconceived facts and is otherwise too, contrary to the law. In sustaining the aforesaid addition, the CIT(A) has overlooked that the burden to establish that the liability had ceased to be the liability of the assessee of the instant year was of the revenue which too had not been discharged by any material and as such, the addition made of Rs.5,96,175/- is thus untenable in law.

3. That the learned CIT(A) has further erred in 'enhancing' the income of the ass ssee company of Rs.2,69,66,400/. The aforesaid addition made and enhanced by the CIT(A) is without jurisdiction and is otherwise too untenable. The CIT(A) has overlooked the submissions of the assessee when making the aforesaid addition.

4 The CIT(A) in fact, without even appreciating that the learned A.O. has neither dealt the issue in the order of assessment nor even was the subject matter of appeal before him could not have any valid justification to enhance the addition since he had no jurisdiction to enhance the income which was neither the subject matter of appeal or even of assessment.

4.1 That the learned CIT(A) went into an error of law when he held that said sum was not new source of income.

5. That, even otherwise the learned CIT(A) has erred in enhancing the income by the aforesaid sum of Rs.2,69,66,400/-, as the expenditure was allowable a business expenditure for the instant assessment year.

6. That the learned CIT(A) has erred in initiating proceedings u/s 271 (1 )(c) of the Act in respect of the aforesaid sum even after recording that the assessee had made wrong claim despite the fact otherwise too, no penalty was leviable, the initiation of proceedings is thus beyond jurisdiction.

7. That the learned CIT (A) has erred in upholding the levy of interest u/s 234B and 234D of the Act as no interest was leviable on the assessee. It is thus prayed that the addition made by the AO and sustained by the CIT (A) of sum aggregating to Rs.32,58,554/- and the enhancement of income made by the CIT Appeals of Rs.2,69,66,400/- be directed to be deleted.”

3. Appellant, DCIT, Central Circle 20, New Delhi (hereinafter referred to as the ‘Revenue’) by filing the present appeal sought to set aside the impugned order dated 27 03 2014 passed by the Commissioner of Income - tax (Appeals)-XXXI, New Delhi qua the assessment year 2009-10 on the grounds inter alia that :-

“1. The order of the Ld. CIT (A) is not correct in law and facts.

2. On the facts and circumstances of the case, the Ltd. CIT(A) has erred in deleting the addition of Rs.64,0,84.000/- made by the AO by disallowing interest paid on loans debited in Profit and Loss Account.

3. On the facts and circumstances of the case. the Ltd. CIT(A) has erred in deleting the addition of Rs.19,89,044/- on account of disallowance of Advertisement & Publicity expenses.

4. On the facts and circumstances of the case, the Ltd. CIT(A) has erred in deleting the addition of Rs.1,44,87,193/- on account of disallowance of Advertisement & Publicity expenses.

5. On the facts and circumstances of the case. the Ltd. CIT(A) has erred in deleting the addition of Rs.94,31,332/- on account of disallowance of Advertisement & Publicity expenses.

6. On the facts and circumstances of the case. the Ltd. CIT(A) has erred in deleting the addition of Rs. 4,11,814/- on account of un-verifiable sundry creditors.

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