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2016 (5) TMI 352 - ITAT DELHI

2016 (5) TMI 352 - ITAT DELHI - [2016] 48 ITR (Trib) 302 - Addition of store relocation expenses - revenue v/s capital expenditure - Held that:- AO in the assessment year 2003-04 has already allowed the expenses by treating the same as revenue in nature. However, we are of the view that Revenue should not have filed this ground of appeal before the Tribunal, because the same expenses has already been admitted by the AO in his order dated 25.3.2015 relevant for the assessment year 2003-04. Follow .....

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an Ltd [2009 (1) TMI 13 - HIGH COURT DELHI] - Decided against revenue - ITA No. 1407/Del/2014 - Dated:- 5-5-2016 - Shri H. S. Sidhu, Judicial Member And Shri J. S. Reddy, Accountant Member For the Petitioner : Ms. Rashmita Jha, Sr. DR For the Respondent : S h . Vikas Srivastava, Adv., Sh. Mayank Aggarwal, CA & Aditi Goyal, CA ORDER Per H. S. Sidhu, JM The Revenue has filed the present appeal against the impugned order dated 31/12/2013 passed by the Ld. Commissioner of Income Tax (Appeals-V .....

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. CIT(A) is erroneous and is not tenable on facts and in law. 4. That the grounds of appeal are without prejudice to each other. 5. That the appellant craves leave to add, amend or forego any ground(s) of the appeal either before or at the time of hearing of the appeal. 2. The facts in brief are that the assessee is a Company incorporated in India under the Companies Act, 1956 and is a resident of India for tax purposes. The assessee is engaged in the business of manufacture and sale of pizzas a .....

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pleted under section 143(3) at a total loss of ₹ 56,157,020/- vide the assessment order dated 26.12.2006. Aggrieved with the assessment order, assessee filed the appeal before the CIT(A) and Ld. CIT(A) has granted the partial relief to the assessee and the additions amounting to ₹ 67,25,428/- and INR 4,39,888 on account of advertisement expenditure and sundry balances written off respectively were deleted by the ld. CIT(A). Thereafter, the case was reopened for assessment u/s. 147 vi .....

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under section 147 read with section 143(3) of the Act on 17.10.2011, making a total adjustment of ₹ 1,96,17,997/- and assessing the income of the assessee at a loss of ₹ 4,37,04,339 by making the following additions:- a) Disallowance under the head Franchisee Fees ₹ 98,93,319/- b) Disallowance under the head Store Relocation Expenses ₹ 12,44,678/- c) Disallowance under the head Debt Restructuring Fees ₹ 84,80,000/- 3. Being aggrieved with the aforesaid assessment or .....

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rary, during the hearing, Ld. Counsel of the Assessee stated that Ld. CIT(A) has passed a well reasoned order, hence, the same may be upheld. Moreover, he submitted that as regards the issue raised in ground no. 1 relating to deletion the addition of ₹ 12,44,678/- being store relocation expenses by treating the same as revenue expenditure is concerned, the same was allowed by the Ld. CIT(A) by following the order of his predecessor in the assessment year 2003-04, in which the Revenue came .....

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/- being store relocation expenses involved in the assessment year 2004-05 may be allowed and this ground may be dismissed accordingly. 6.1 He further submitted that as regards the issue raised in ground no. 2 relating to deletion the addition of ₹ 84,80,000/- being debentures restructuring by treating the same as revenue expenditure is concerned, the same was allowed by the Ld. CIT(A) by following the jurisdictional High order in the case of CIT vs. Gujarat Guardian Ltd. 222 CTR 526 (Del. .....

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Delhi in assessee s own case and the Hon ble High Court of Delhi vide dated 1.8.2014 passed in ITA No. 311/2014 has allowed the ground in favour of the assessee and dismiss the appeal of the revenue. Therefore, he requested that this ground may also be allowed in favour of the assessee and against the Revenue and dismiss the Appeal filed by the Revenue. 7. We have heard the both parties and perused and considered the relevant records available with us especially the impugned order passed by the .....

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uments, invoices and agreements furnished by the appellant. After examining the various documents produced by the appellant, it is observed that the expenses were in the nature of rent of godown, security guard expenses, transportation charges for shifting of materials from one place to another, loading and unloading charges, dismantling charges and routine repair and maintenance charges and other expenses of similar nature. From the very nature of these expenses, they are found to have been inc .....

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de by the AO is deleted. 7.1.1. We find that in the asstt. Year 2003-04, the Ld. CIT(A) has allowed the similar ground and against which the Revenue came up in appeal before the Tribunal and the Tribunal vide order dated 24.10.2012 passed in ITA No. 183 to 186/Del/2011 (Ayrs. 2003-04 to 2005-06) has set aside the issue to the file of the AO by observing as under:- We have heard both the sides, considered the material on recorded as well as the case laws cited by the rival sides and find that the .....

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ed the expenses of ₹ 20,33,590/- made for relocation of store in the assessment year 2003-04 by holding as under:- In view of Hon ble ITAT s directions the submission of the assessee company has been thoroughly examined. In view of the discussions held with the AR of the assessee company and also in view of the submissions made during the assessment proceedings, the assessee s claim of deduction u/s. 80G amounting to ₹ 80,000/- and expenses of ₹ 20,33,590/- made for relocation .....

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al, because the same expenses has already been admitted by the AO in his order dated 25.3.2015 relevant for the assessment year 2003-04. Following the consistent view adopted by the Revenue in the assessment year 2003-04 in assessee s own case, we dismiss the ground no. 1 raised by the revenue. We are also of the considered view that the Ld. CIT(A) has passed a well reasoned order which does not need any interference on our part, hence, we uphold the same. 7.2 With regard to ground no. 2 relatin .....

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the jurisdiction Delhi High Court in the case of CIT vs. Gujarat Guardian Ltd. (Supra), it is observed that the restructuring fees paid by the appellant to renegotiate the rate of interest on debentures represented the present value of differential rate of interest which should be allowed as revenue expenditure. It is also seen that the above issue on similar facts was decided in favour of the appellant by the Hon ble ITAT in its order for the AY 2003-04 to 2005-06. Accordingly, this ground of .....

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s issue which got matured during the year under consideration. So, he has arranged the finance by paying ₹ 15 lakhs to M/s Infrastructure Leasing & Financial Services Ltd. In the light of case laws cited by the Ld. CIT(A) and in the absence of any contrary decision or evidence produced or any higher courts orders having been placed to support the plea raised by the department, we do not find any reasonable ground to interfere in the order passed by the CIT(A), which is confirmed and th .....

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e Tribunal in the impugned order has recorded a finding that ₹ 15 lacs was paid to the debentures holders in view of the restructuring of the debenture terms. The respondent-assessee had issued non-convertible redeemable debentures of ₹ 25 Crores during the Financial year 2000-01 to meet working capital requirements. These debentures could not be redeemed and during the impugned assessment year, the respondentassessee re-negotiated terms and conditions of the issue with the debenture .....

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