2023 (7) TMI 750 - HC - Income Tax

Disallowance on warehouse rent expenses - HELD THAT - ITAT confirmed that disallowance on account of warehouse rent being excessive payment was rightly deleted by the CIT(A) as the assessee has given the details related to warehouse expenditure on rent thereby filing the details of related to entry/payment of the corresponding receipts along with cheques. CIT(A) has taken cognizance of the same referring to the bills and invoices towards warehouse rent and recipient as party has already paid due tax thereon. Therefore, ground of Revenue s appeals are dismissed. Addition of repairs and maintenance - HELD THAT - ITAT confirmed that the said party and the assessee s books certain repair and maintenance was carried out as per the bill dated 01.03.2010 and 11.03.2010. The payments were made after deducting TDS. The parties directly confirmed the said charges while replying notice u/s133(6) of the act. Thus, AO has totally ignored the evidences placed before him and, therefore, the CIT(A) rightly deleted this addition Addition of interest expenses - HELD THAT - ITAT confirmed that CIT(A) did not agree with the view of the Assessing Officer that the said addition was required to be made as there was no case made out on facts and in law to invoke provisions of section 36(1)(iii) of the Act and making any disallowance. In arriving at such finding, the Commissioner of Income Tax did not make any error. He relied on various decisions. The finding was confirmed by the Tribunal. All the concurrent findings are arrived at by the appellate Commissioner and the Income Tax Appellate Tribunal in favour of the assessee. The findings are arrived at on the basis of material available and appreciation thereof. They were the findings on facts, not liable to be interfered with by this court.

Summary

Issues Involved:
The judgment involves challenging the order of the Income Tax Appellate Tribunal regarding additions made by the Assessing Officer for warehouse rent expenses, repairs and maintenance expenses, and interest expenses under the Income Tax Act, 1961 for the assessment year 2010-2011.

Warehouse Rent Expenses:
The appellant challenged the addition of Rs. 2,86,59,222 made by the Assessing Officer for warehouse rent expenses. The Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal both found in favor of the appellant. They held that the disallowance lacked merit and supporting material, leading to the deletion of the addition. The Tribunal specifically noted that the appellant provided details related to warehouse expenditure, including receipts and invoices, justifying the expenses. As a result, the ground related to warehouse rent expenses was dismissed.

Repairs and Maintenance Expenses:
Regarding the addition made by the Assessing Officer for repairs and maintenance expenses amounting to Rs. 18,10,538, both the appellate authority and the Tribunal ruled in favor of the appellant. The appellate Commissioner examined the account details and found no credible evidence to doubt the genuineness of the transactions. The Tribunal concurred, stating that the Assessing Officer ignored the evidence presented, leading to the deletion of this addition. Consequently, the ground related to repairs and maintenance expenses was dismissed.

Interest Expenses:
The Commissioner of Income Tax disagreed with the Assessing Officer's decision to add Rs. 4,84,052 as interest expenses under section 36(1)(iii) of the Act. The Commissioner found no legal basis to invoke the provision and make the disallowance. This decision was upheld by the Tribunal, emphasizing that the Assessing Officer disregarded the evidence presented by the appellant. Therefore, the addition of interest expenses was also deleted.

Conclusion:
The appellate Commissioner and the Income Tax Appellate Tribunal both ruled in favor of the appellant on all three counts. They found no justification for the additions made by the Assessing Officer and concluded that the appellant had provided sufficient evidence to support the expenses in question. As a result, the substantial questions of law raised were deemed not to arise, and the appeal was dismissed. The concurrent findings in favor of the appellant were based on factual analysis and material appreciation, thus not subject to interference by the court.