TMI Blog2018 (6) TMI 1189X X X X Extracts X X X X X X X X Extracts X X X X ..... n be sum over lap of the expenses between two years. However that does not give any rise to the AO to disallow the expenditure @10% and treat it as work in progress - Decided against revenue Disallowance of repair and maintenance - AO stated that this expenditure is incurred for wiring electricity etc is capital in nature for the reason that assessee is carrying business in rented premises - Held that:- the expenditure incurred by the assessee cannot be said to be an expenditure of an enduring nature. The above sum is paid by the assessee on 01.11.2009 to M/s. Sterling and Wilson Pvt. Ltd for wiring and electrical accessories to make the lease premises usable for the business of the assessee - Decided against revenue Disallowance of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02,738/- being 10% of ₹ 40,50,27,384/- (excluding depreciation) made by the AO? 2. Whether on the facts and circumstances of the case in law, the Ld. CIT (A) was right in deleting the addition of ₹ 4,79,159/- treating the same as revenue nature? 3. That the grounds of appeal are without prejudice to each other. 4. That the order of the Ld. CIT (A) is erroneous and is not tenable on facts and in law. 3. The revenue has raised the following grounds of appeal for Assessment Year 2011-12:- 1 Whether on the facts and circumstances of the case in law, the Ld. CIT (A) has erred in deleting the addition of ₹ 3,99,88,032/- made by A.O. on account of expenses claimed by the assessee? 2 Whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0% of the total expenditure of ₹ 804907708/-. The ld AO noted that similar disallowance of ₹ 4.05 crores has been made in the earlier years and therefore, from the disallowance of ₹ 8.04 crores he granted the credit for the same and made the net disallowance of ₹ 3.99 crores. 7. The assessee preferred appeal for both the years before the ld CIT(A) who deleted the addition for AY 2010-11 that the impugned addition is based upon the rejection of the book results but the ld AO has failed to reject the books of accounts. The ld AO has also not given any reason that why he is not satisfy about the correctness and completeness of the books of accounts. He further held that looking to the nature of business the project w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended by the assessee that there is not remained any work in progress at the end of the year. The ld AO asked the assessee to furnish project wise revenue and the project wise expenses which the assessee did not maintain and therefore, same was not given and on our examination of the method of accounting applied by the assessee, it appears that when the assessee has received billing as per milestone and from the milestone till the close of the year there are no expenditure identified by the ld AO then there cannot be any work in progress in the business of the assessee. The ld AO could not find out that whether there is such expenditure exists or not. It was also not found by the ld AO that the assessee has incurred substantial expendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld CIT(A). 13. We have carefully considered the rival contentions and perused the orders of the lower authorities. On examination of the information we do not find any infirmity in the order of the ld CIT(A) for the reason that the expenditure incurred by the assessee cannot be said to be an expenditure of an enduring nature. The above sum is paid by the assessee on 01.11.2009 to M/s. Sterling and Wilson Pvt. Ltd for wiring and electrical accessories to make the lease premises usable for the business of the assessee. Accordingly, ground No. 2 of the appeal of the revenue for AY 2010-11 is dismissed. 14. Ground No. 2 of the appeal is with respect to disallowance of consultancy charges of ₹ 303009385/- as in the previous year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted the detailed reason for increase in consultancy expenditure as was submitted before the ld AO. With respect to the parties from whom reply could not be obtained u/s 133(6) of the Act, the assessee submitted that out of 9 parties only three parties responded to the ld AO and the balance six parties either did not reply or notice were not served. The assessee submitted the details of all the parties before the ld CIT(A). The details submitted were copies of the income tax return, TDS certificate, copies of travelling expenses, copies of contract and bank statement to prove the expenditure. In view of these overwhelming details submitted by the assessee before the ld CIT(A), he deleted the disallowance. Even otherwise if before the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
