9911796707
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Issues:
1. Delay in filing the appeal 2. Nature of expenditure - revenue or capital Delay in filing the appeal: The appellant filed an appeal 69 days late, attributing the delay to both partners being abroad during the due date for filing. The partners returned and filed the appeal after the due date. The Tribunal considered the explanation provided and condoned the delay, allowing the appeal to proceed. Nature of expenditure - revenue or capital: The original assessment allowed an expenditure of Rs. 17,811 for making an approach road pucka, which the audit later deemed as capital expenditure. The appellant contended that the reassessment proceedings were void as the audit's advice influenced the ITO's decision, which, according to the Supreme Court, is beyond the audit's scope. The AAC upheld the reopening of the assessment but reduced the addition to Rs. 9,861. The Tribunal held that the ITO had already considered the expenditure during the original assessment, and the audit's attempt to influence the decision was improper. Citing the Supreme Court's judgment, the Tribunal concluded that the reassessment proceedings were flawed and canceled the orders of the lower authorities, restoring the status quo ante. In conclusion, the Tribunal allowed the appeal, emphasizing that the audit's attempt to advise the ITO on the nature of the expenditure exceeded its scope, rendering the reassessment proceedings invalid.
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