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TMI Blog2010 (10) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... f Directors of the assessee was a commercial decision taken in the circumstances of the case, where rebate was allowed to certain institutional bodies i.e., Insurance Companies, HSIDC, HFC, etc. against advances received during the years 1991 to 2002, wherein increase in the cost, due to delay in construction of houses, was charged to them - appeal of the revenue is dismissed. - IT APPEAL NO. 397 (CHD.) OF 2010 - - - Dated:- 14-10-2010 - G.S. PANNU, MS. SUSHMA CHOWLA, JJ. Smt. Sunita Puri for the Appellant. B.K. Nohria for the Respondent. ORDER Ms. Sushma Chowla, Judicial Member. The appeal by the revenue is against the order of the Commissioner of Income-tax (A), Panchkula dated 1-2-2010 relating to assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance of expenses relatable to the current year could be made. The assessee furnished no such detail during the course of initial assessment proceedings. (ii) There was also no evidence or document showing that the assessee was legally bound to reduce the cost on the basis of advance payment. (iii) It was discussed in the initial assessment order, that the allowability of any expenses depends on the nature of liability. The assessee could not establish following two things with regard to these expenses. (i) That it was an allowable expenditure in the first place and the assessee had a legal obligation of incurring such expenditure. (ii) Notwithstanding the above, that the expenditure was entirely relatable to the current ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer has passed the order without merit. (iii) The Assessing Officer disallowed the legitimate expenditure of the assessee on the ground that it is not relatable to the assessment year under consideration and only that portion is allowable which relates to assessment year under consideration without citing the provision of Income-tax Act under which the addition is to be made. The allowance of rebate has not been disputed by the Assessing Officer. The Assessing Officer has not been able to work out as to how much of the rebate relates to the assessment year under appeal and how much of it relates to the previous year. The Assessing Officer has nowhere mentioned that the claim of rebate is false and cannot be allowed. (iv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration only and the same is not relatable to the earlier assessment years." The Commissioner of Income-tax (A) held as under : "4.1 On careful consideration of the above facts and submissions, I find force in the arguments of the counsel that rebate allowed to various Institutions is a genuine business expenditure since the same has been allowed as per the decision of the Board of Directors and is in the form of compensation to various buyers on the advances given by them which were lying with the appellant for a number of years and on which no interest was paid by the appellant." 7. Smt. Sunita Puri, learned CIT DR appeared for the revenue and Shri B.K. Nohria appeared for the assessee and put forward their contentions. 8. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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