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TMI Blog2024 (6) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... AO in assessment years 2002-03, 2003-04 and 2005-06. While deciding the issue, learned first appellate authority deleted the disallowances. While deciding the appeals filed by the Revenue [ 2019 (3) TMI 693 - ITAT DELHI] upheld the decision of learned first appellate authority. On going through the aforesaid order of the Tribunal, we find parity of facts between the impugned assessment year and the appeals for other assessment years decided by the Tribunal. That being the factual position on record, we delete the disallowance made u/s 36(1)(iii) of the Act. This ground is allowed. Disallowance towards cost of acquisition of land - assessee could not furnish the bills/vouchers pertaining to the aforesaid cost - as alleging that the assessee furnished the photocopy of letter issued by MTDC and no original was furnished, FAA sustained the disallowance - HELD THAT:- As could be seen, learned first appellate authority has rejected the additional evidence on the ground that it is only a photocopy and no original document was furnished. From the facts on record, it is observed that additional evidence furnished by the assessee is a letter from MIDC, which is a State Government organizati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard to the assessee. Ground is allowed for statistical purposes. Taxability being interest on income tax refund - HELD THAT:- While deciding assessee s appeal, learned first appellate authority granted relief to the assessee. While giving effect to the order of learned Commissioner (Appeals), the AO determined interest on income tax refund, which according to the assessee, was offered to tax. Thus, it is the case of the assessee before us that once the interest on income tax refund is withdrawn, the addition made deserves to be deleted. Having considered rival submissions, we are of the view that assessee s claim needs to be factually verified by the AO having regard to the facts and evidences brought on record. Therefore, we restore this issue to the AO for fresh adjudication after providing due and reasonable opportunity of being heard to the assessee. Ground is allowed for statistical purposes. Disallowance of foreign as well as domestic travel expenses - HELD THAT:- The observation of the AO while disallowing the expenses is too ambiguous and general in nature. He has not doubted the fact that the expenses, indeed, were incurred. The only reason for disallowing foreign travel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g perused the observation of the Assessing Officer, we find that the reason given for disallowance of expenditure is very much general and vague. He has not stated on what basis he has come to the conclusion that such expenses are not for the purpose of business. Undisputedly, the Assessing Officer has not doubted the fact that expenses were incurred. No infirmity in the decision of learned first appellate authority in deleting the disallowance. This ground is dismissed. - Shri Saktijit Dey, Vice-President And Shri Naveen Chandra, Accountant Member For the Assessee : Sh. R.M. Mehta, CA For the Department : Sh. Vivek Kumar Upadhyay, Sr. DR ORDER PER SAKTIJIT DEY, VICE-PRESIDENT Captioned cross appeals arise out of order dated 18.07.2018 of learned Commissioner of Income Tax (Appeals)-XXVI, New Delhi, pertaining to assessment year 2004-05. ITA No.5552/Del/2018 (Assessee s Appeal) 2. In ground no. 1 and its sub-grounds, the assessee has challenged proportionate disallowance of interest expenditure amounting to Rs. 21,11,00,000/-. 3. Briefly the facts relating to this issue are, the assessee is a resident corporate entity stated to be engaged in the business of manufacturing and sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Basti Sugar Mills Co. Ltd. [2018] 98 taxmann.com 401 (Delhi); 7. Principal Commissioner of Income-tax v. Reebok India Company [2018] 98 taxmann.com 413 (Delhi); 5. The learned Departmental Representative, though, agreed that the issue is squarely covered by the decision of Tribunal in assessee s own case, however, he relied upon the observations of the Assessing Officer and learned first appellate authority. 6. We have considered rival submissions and perused the materials on record. We have also applied our mind to the decisions relied upon. Undisputedly, the disallowance in question has been made by the Assessing Officer on the ground that the borrowed funds have been utilized in making interest free advances to the group companies. The learned first appellate authority has also upheld the disallowance. However, facts on record reveal that the so called investments are not in the nature of loans and advances, but are investments in equity and preference shares of group companies. Therefore, the allegation of the departmental authorities that the assessee has diverted borrowed funds to group companies without charging any interest are factually incorrect. Further, the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asset during assessment proceeding. However, before the first appellate authority, the assessee did furnish the additional evidences to support its claim towards cost incurred. 11. As could be seen, learned first appellate authority has rejected the additional evidence on the ground that it is only a photocopy and no original document was furnished. From the facts on record, it is observed that additional evidence furnished by the assessee is a letter from MIDC, which is a State Government organization. If learned first appellate authority had any doubt regarding the authenticity of such document, he could have conducted necessary inquiry himself or through the Assessing Officer to verify the authenticity of the document. Without conducting any such inquiry, he could not have rejected the additional evidences. 12. In view of the aforesaid, we restore the issue to the Assessing Officer to verify assessee s claim by properly examining the documentary evidences furnished by the assessee by way of additional evidences. In case, any inquiry is required to be conducted with reference to such evidences, it is open to the Assessing Officer to do so. However, the Assessing Officer must prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng any reason, learned first appellate authority has sustained the disallowance alleging lack of complete information. 19. Considering the fact that documentary evidences furnished by the assessee have not been properly evaluated by the departmental authorities, we are inclined to restore this issue to the file of Assessing Officer for de novo adjudication after providing due and reasonable opportunity of being heard to the assessee. Ground is allowed for statistical purposes. 20. In ground no. 5, the assessee has challenged the taxability of Rs. 72.67 lakhs, being interest on income tax refund, pertaining to assessment year 2003-04. 21. We have heard the parties and perused the materials on record. While processing assessee s return of income, the Assessing Officer, in the intimation issued under section 143(3) of the Act, computed interest on income tax refund payable to the assessee at Rs. 72,67,332/-, which was adjusted against certain arrear demand. Subsequently, after completion of assessment under section 143(3) of the Act, the Assessing Officer, while computing the income of the assessee, withdrew the interest on income tax refund amounting to Rs. 72,85,176/- due to the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer while disallowing the expenses is too ambiguous and general in nature. He has not doubted the fact that the expenses, indeed, were incurred. The only reason for disallowing foreign travel expenses is, the assessee has no business interest in the cities/countries, in respect of which, foreign travel expenses have been incurred. However, what he means by business interest is not clear. There is absolutely no observation by the Assessing Officer that the foreign travel expenses were not related to assessee s business or were personal in nature. Similarly, he has disallowed the domestic travel expenses by observing that the concerned person has no business connection to the assessee. On what basis the Assessing Officer has come to such conclusion is not forthcoming from the assessment order. In the aforesaid scenario, we do not find any infirmity in the decision of learned first appellate authority in deleting the disallowances. Ground is dismissed. 28. In ground no. 2, the Revenue has challenged deletion of disallowance of prior period expenses amounting to Rs. 8,48,49,423/-. 29. Briefly the facts are, in course of assessment proceedings, the Assessing Officer, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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