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Ngenox Technologies Pvt. Ltd. Versus ACIT Central Circle 2, New Delhi

2017 (11) TMI 998 - ITAT DELHI

Allowable business expenses - non furnishing of the primary details at any stage of proceedings and infirmities in the documents that were produced at the appellate stage, created a reasonable doubt as to the authenticity of the provision and the expenditure - Held that:- Assessee failed to plead before us any reasons for their inability in securing such evidence at least by now in support of their contentions. All these facts put together, do not inspire any confidence in our mind to believe th .....

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bable expenditure that may have to be paid for which the provision has to be created. We, therefore, find that the plea taken by the assessee does not seem to be believable ex facie, as such. With this view of the things, we do not propose to interfere with the findings of the Ld. CIT (A) while dismissing the appeal. We, therefore, find the appeal devoid of merits and accordingly, the same is liable to be dismissed. Appeal of the assessee is dismissed. - ITA No.-5168/Del/2013 - Dated:- 16-11-201 .....

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e Ld. CIT (A) has erred in law and facts of the case in confirming the addition of ₹ 51,00,000/- made by the AO by rejecting the claim of expenses incurred for the business, which is arbitrary, baseless, unjustified and bad in law. 2. The assessee craves to leave the right to add, amend or modify the grounds of appeal. 2. Briefly stated facts are that the assessee is a company engaged in the business of providing IT enabled connectivity, management and control of buildings, integrated faci .....

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oportionate cost of project material. He called upon the assessee to explain why there is huge difference in the cost of material at 40.64% in the earlier, whereas it happens to be at 49.73% for the current year. Not being satisfied with the explanation of the assessee that it is not an abnormal thing in Hi-tech business, AO verified the details of cost of material and found that the assessee had debited a sum of ₹ 51,00,000/- in its projects-import ledger account. AO recorded a finding th .....

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ing Company respectively. On verification of these amounts of expenditure namely ₹ 6,43,867/- under invoice dated 16.03.2010, ₹ 7,56,214/- under invoice dated 30.01.2011 issued by Tridonic Atco and ₹ 6,49,019/- invoice dated 30.01.2011 issued by Nesma Trading Company, Ld. CIT (A) recorded that the assessee s name is not to be found on the invoice dated 16.03.2010, whereas under invoice dated 30.01.2011 issued by Tridonic Atco and Nesma Trading Company the goods were delivered o .....

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as such, the same has to be disallowed. As a net result of the above discussion, Ld. CIT (A) upheld the disallowance to the tune of ₹ 51 lakhs and dismissed the appeal. Hence, the assessee is before us in this appeal. 4. It is the submission of the Ld. AR that the project under the name and style M/s Saudi International Petrochemical Company (SIPCHEM) was started in the AY 2008-09 and was completed in the AY 2010-11. The assessee recognized an income of ₹ 3,00,61,376/- for the year e .....

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and the bills of expenses received. Further the income was booked instantly on the basis of negotiation as soon as acknowledge by the client. This resulted in booking the Revenue in full, but the corresponding amount of expenses were also booked in compliance with the matching concept. According to the Ld. AR having made the provision for the expenses to a tune of ₹ 51 lakhs, at the end of the year the negotiations were kept going on and finally the expenses only to the tune of ₹ 20 .....

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20,40,900/-, the invoices were not found to be satisfactory, as such, that amount is also liable to be disallowed. 5. Ld. DR argued that there is an attempt to over write the invoices as is evident from the invoice dated 30.01.2011 said to have been issued by Nesma Trading Company and the authorities below are quite justified in disallowing the expenses for want of proof. Further according to the Ld. DR when the assessee received goods long prior to the end of the relevant assessment year, there .....

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received in the earlier financial years the assessee should have made the provision in those years only. 6. As could be seen from the assessment order by paragraph No. 4, AO recorded that in respect of the debit entry relating to ₹ 51 lakhs in the project import ledger account of the assessee, the assessee was called upon to clarify the same with reasons for claiming the provision of expenses vide order-sheet entry dated 24.12.2012 but no proper reply was given. Ld. CIT (A) also vide para .....

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e Tridonic Atco and one by Nesma Trading Company, whereas no details in respect of the expense of ₹ 30,50,900/- was ever produced. There is no dispute in respect of the observations of the Ld. CIT (A) that the delivery of goods under the vouchers submitted by the assessee took place more than one year prior to the date of invoices. In such an event, we do not find any reasonable explanation from the assessee as to why the provision is created for the amounts more than twice the expenditure .....

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ry note or any other correspondence evidencing the placing of order and receiving the same in the year under consideration, we are of the opinion that for the same reason the assessee should not have pleaded any delay in receiving the invoices. When the goods were delivered even according to the assessee more than a year prior to the dates of invoices, nothing prevented the assessee from securing the relevant documents in digital form without any delay. The defense taken by the assessee for not .....

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