2023 (10) TMI 443 - AT - Income Tax

Tribunal upholds decisions on expenses, deposits, and dividend income disallowances.

The Tribunal upheld the first appellate authority's decision to delete the disallowance of reimbursement of expenses to the agent and the disallowance of ... Disallowance of reimbursement of expenses to agent - CIT(A) deleted addition - HELD THAT:- As observed that in the assessment order passed in case of the Agent, viz., Sahara India firm, the payment has been accepted without any adverse finding. It is further observed, in the impugned assessment year, the reimbursement of expenses to the agent works out to 11.81% of the total deposits mobilized during the year. Whereas, in assessee’s own case in assessment year 1994-95 [2007 (10) TMI 636 - ITAT, DELHI] Tribunal has accepted the expenditure at the rate of 10.3% of the deposits mobilized to be reasonable expenditure. In the assessment year 1995-96 [2013 (10) TMI 697 - ITAT DELHI] the Tribunal has allowed reimbursement expenses, which worked out to 13.06% of the deposits mobilized during the year. Thus, in view of the aforesaid factual position, we hold that learned Commissioner (Appeals) was justified in deleting the disallowance. This ground is dismissed. Disallowance of write back of provision of dividend income - HELD THAT:- We find, though, the assessee created the provision for dividend in assessment year 1995-96 and offered it as income, however, actually it did not receive any dividend. Therefore, the provision was reversed in assessment year 1996-97 and assessee claimed the deduction of the amount already offered to tax in the immediately preceding assessment year. The aforesaid factual position remains uncontroverted. Thus, it is apparent, AO without properly examining the fact in accordance with the direction of the Tribunal, has repeated the disallowance. That being the case, we do not find any infirmity in the decision of learned first appellate authority. Accordingly, we uphold the same by dismissing the ground raised.. Issues involved:The issues involved in this judgment are:1. Disallowance of reimbursement of expenses to agent.2. Disallowance of claimed expenses instead of deposits.3. Write back of dividend income.Dispute over disallowance of reimbursement of expenses to agent:The dispute revolves around the disallowance of Rs. 81,50,93,579/- representing reimbursement of expenses to an agent. The Assessing Officer restricted the deduction claimed by the assessee, but the first appellate authority deleted the disallowance. The Tribunal directed the Assessing Officer to re-examine the expenditure, considering previous years' decisions. The Assessing Officer repeated the disallowance, but the first appellate authority deleted it based on similar cases in other assessment years.Challenge over disallowance of claimed expenses instead of deposits:The Revenue challenged the disallowance of Rs. 50,12,45,795/- on account of interest and deposits. The Assessing Officer restricted the claim made by the assessee, leading to a series of appeals and directions. Ultimately, the Tribunal upheld the decision of the first appellate authority in deleting the disallowance due to previous rulings in similar cases.Deletion of disallowance of write back of dividend income:The issue pertains to the deletion of disallowance of a provision of dividend income amounting to Rs. 62,50,000/-. The Assessing Officer disallowed the deduction claimed by the assessee, which was reversed in the next assessment year. The Tribunal directed a re-examination, and the first appellate authority deleted the disallowance based on the fact that the amount had already been offered as income in the previous assessment year.Separate Judgement:No separate judgement was delivered by the judges in this case.