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2020 (5) TMI 648 - ITAT MUMBAIExpenditure incurred towards maintenance / upkeep of inventories - being part of trading operations - allowable revenue expenditure - HELD THAT:- Assessee has incurred expenditure towards maintenance of inventories. The payment is duly supported by the debit note issued by M/s Sharan & Co. It is also evident that said entity has made further payment to another entity i.e. M/s First Canvass towards rendering of services, which fact AO has also accepted in the alternative and proposed that the payment to that extent could be allowed to the assessee. From perusal of Tribunal order for AY 2009-10, as placed on record, it is also noted that similar payment was paid by the assessee to avail similar services in that year. The Ld. AO termed the payment to be excessive and allowed partial claim to the extent of ₹ 37.97 Lacs. CIT(A) deleted the disallowance as proposed by Ld.AO which was agitated by the revenue before this Tribunal. Tribunal, inter-alia, noting that the payment was in accordance with the agreed terms, it was not correct on the part of AO to question the correctness of the decision taken by the assessee out of commercial expediency. Therefore, the revenue’s appeal was dismissed. We find that an expenditure has been incurred by the assessee towards maintenance / upkeep of inventories and the same being part of trading operations, would constitute allowable revenue expenditure. Therefore, by deleting the impugned disallowance - Decided in favour of assessee.
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