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TMI Blog2012 (6) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... der the facts and circumstances of the case - ground raised by the Revenue is dismissed Addition made by the Assessing Officer on account of courier charges - no response by the party to the notice issued by the Assessing Officer u/s.133(6) and summons issued u/s.131 of the I.T. Act - assessee neither produced the said person nor made any efforts to substantiate its claim – Held that:- Payments have been made by A/c payee cheques and all the details were furnished before the A.O - assessee has discharged the onus cast upon it. Merely because the other party did not attend the office of the A.O. in response to the summon u/s 131, the assessee, in our opinion, cannot be blamed for it. The party has also not denied the transactions. The A.O. has enough power to enforce the attendance of the other party which he failed to do in the instant case - no addition was called for by the A.O. and the order of the ld. CIT(A) deleting the addition is justified - appeal filed by the Revenue is dismissed. - ITA No. 5997/Mum/2008 - - - Dated:- 12-10-2011 - SHRI R.S. PADVEKAR, SHRI R.K. PANDA, JJ. Appellant by Mr. G.P. Trivedi Respondent by Mr. Hiro Rai ORDER PER R.K. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld. CIT(A), it was submitted that the expenses are purely of revenue nature and were laid out wholly and exclusively for the purpose of business, therefore, the same has to be allowed as deduction u/s 30 37 of the I.T. Act in the year of incurrence of the said expenses. It was submitted that the assessee is engaged in the business of rendering courier services and in order to strengthen the network and expand its existing business, the company has set up offices, collection centre, branches etc. at various locations during the year under consideration and for this purpose, the company has incurred various expenses of revenue nature. The network development expenses consist of normal business, business related revenue expenses such as salaries, communication expenses, rent, conveyance, traveling and other such administrative expenses in the course of its business. For the purpose of accounts, the said expenses were treated as deferred revenue expenditure under the caption of network development expenses and in the balance sheet, the said expenditure is shown under the head misc. expenses . It was submitted that all expenses are revenue in nature and no capital expenditure ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. After hearing both the sides, we do not find any infirmity in the order of the ld. CIT(A). The genuineness of the expenditure are not doubted by the A.O. It is only the allowability of the same during this year as per the computation of income or its allowability over a period of 5 years as per accounting treatment given in the books of account. It has been held in various judicial decisions that revenue expenditure is allowable in the year of its incurrence u/s 37(1) of the Act irrespective of accounting treatment given by the assessee. Whether the assessee is entitled to a particular deduction or not will depend on the provision of law relating thereto and not on the view which the assessee might take of his rights nor can the existence or absence of entries in his books of account be decisive or conclusive in the matter. If the nature of expenses are such that these are allowable as incurred for business purpose, it should be allowed in toto irrespective of the fact that it was claimed to be deferred revenue expenditure for the purpose of Companies Act. Further, the assessee has already set up its business in the preceding assessment year. Therefore, the expenditure incurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses cannot be ruled out. Further we find merit in the submission of the ld. counsel for the assessee that there cannot be an element of personal use in a corporate entity and no disallowance has been made in the scrutiny assessment for A.Y. 2003-04. Since the A.O. has not brought on record specific evidence of any expenditure which is personal in nature or which is not for the purpose of business, therefore, we are of the considered opinion that no adhoc disallowance can be made under the facts and circumstances of the case. We, therefore, uphold the order of the ld. CIT(A) on this issue and the ground raised by the Revenue is dismissed. 7. Ground No. 3 reads as under:- The Ld. CIT(A) has erred on facts and in law in directing the Assessing Officer to delete the addition of Rs..7,58,898/- made by the Assessing Officer on account of courier charges without appreciating the fact that there was no response by the party namely M/s. Airbone Express (India) Pvt. Ltd. to the notice issued by the Assessing Officer u/s.133(6) and summons issued u/s.131 of the I.T. Act and that the assessee neither produced the said person nor made any efforts to substantiate its claim . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the existence of the party. The said party has PAN and has been filing his return of income and the payment was made by A/c payee cheques. The copy of ledger account along with bank statement were also furnished in support of the claim. Merely because the said party did not turn up before the A.O. in response to notice u/s 133(6), the claim of the assessee cannot be rejected. Aggrieved with such order of the ld. CIT(A), the Revenue is in appeal before us. 8. We have considered the rival arguments made by both the sides, pursued the orders of the Assessing Officer and the CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. There is no dispute to the fact that the notice issued u/s 133(6) were not complied with by the party for which a summon u/s 131 was served. However, in response to the said summon also the party namely Airbrone Express India P. Ltd. did not appear before the A.O. for which the A.O. disallowed the said expenses on the ground that the assessee failed to substantiate the claim. From the various details filed by the assessee before the A.O. and CIT(A) it is seen that the assessee has provide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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