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2018 (10) TMI 1107 - AT - Income TaxBusiness expenditure and claim of depreciation - disallowance on the ground that assessee has not carried out business activities. - CIT(A) also rejected the assessee s alternate claim that the expenses were allowable U/s 57(iii) - Assessee submitted that the Ld. CIT(A) had decided the identical issues regarding allowability of business expenses and regarding allowability of depreciation in favour of the assessee for Assessment Year 2013-14; which was accepted by Revenue and no appeal was filed by Revenue. The Ld. Counsel for Assessee further submitted that in Assessment Year 2014-15, the Assessing Officer himself allowed the business expenses as well as depreciation on the aforesaid issues. It was further submitted by the Ld. Counsel for Assessee that the disputed issues in the present appeal before us, in ITAT, are squarely covered in favour of the assessee by virtue of order of ITAT, Delhi Benches, Delhi in assessee s own case. Held that - following the decision in the earlier case which is accepted by the revenue, decided in favor of assessee.
Issues:
1. Disallowance of business expenses and depreciation for Assessment Year 2012-13. 2. Confirmation of disallowances by Ld. CIT(A) and subsequent appeal before ITAT. 3. Comparison with similar issues in Assessment Years 2013-14 and 2014-15. 4. Applicability of ITAT order dated 29.08.2008 in the current case. Analysis: 1. The Assessee's appeal was against the disallowance of business expenses and depreciation for Assessment Year 2012-13 by the Assessing Officer under section 143(3) of the Income Tax Act, 1961. The Ld. CIT(A) confirmed these disallowances, citing that the Assessee did not carry out business activities, and rejected the claim under section 57(iii) of the IT Act. The Assessee appealed before ITAT, challenging the disallowances totaling to ?22,47,363 for business expenses and ?9,68,237 for depreciation. 2. During the hearing, the Appellant presented written submissions highlighting that similar issues were decided in favor of the Assessee for Assessment Year 2013-14 and 2014-15. In the earlier years, the CIT(A) and Assessing Officer allowed business expenses and depreciation, which were not appealed by the Revenue. The Appellant argued that the current appeal should also be allowed based on the precedents set in previous years and the ITAT order dated 29.08.2008 in the Assessee's own case for Assessment Years 2001-02 & 2002-03. 3. The Ld. Counsel for Assessee contended that the issues in the present appeal were similar to those in previous years where the Assessee's claims were accepted. The Ld. DR, representing the Revenue, failed to distinguish the current year's facts from those of Assessment Years 2013-14, 2014-15, and 2001-02 & 2002-03. As a result, ITAT allowed the Assessee's appeal, deleting the disallowances of business expenses and depreciation, following the precedent set in the Assessee's own case for Assessment Years 2001-02 & 2002-03. 4. The ITAT's decision to allow the Assessee's appeal was based on the failure of the Revenue to distinguish the current case from previous years where the Assessee's claims were accepted. By following the precedent set in the Assessee's own case for Assessment Years 2001-02 & 2002-03, ITAT deleted the disallowances amounting to ?22,47,363 for business expenses and ?9,68,237 for depreciation for Assessment Year 2012-13. This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the reasoning behind ITAT's decision to allow the Assessee's appeal.
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