TaxTMI 
TaxTMI 
2013 (3) TMI 121
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.... the case in brief are that the assessee is engaged in the business of running a business centre. During the course of assessment proceedings the A.O. noted from the details filed by the assessee for repairs and maintenance of furniture and fixtures that the assessee has claimed total expenses of Rs. 65,94,540/- as revenue expenditure. He observed that all these expenses relate to building of furniture and fixtures in the premises taken from MMTC Ltd. According to the A.O. the nature of expenses are of capital in nature and the same cannot be allowed as revenue expenditure. Even as per the provisions of section 30 the repairs cannot be treated as a current repairs as there is no proof on record that speaks that the cost of repairs as claimed by the assessee were undertaken as a part of rent agreement entered into with MMTC. He further noted that assessee had claimed opening balance of repairs & maintenance expenses incurred in the preceding assessment years amounting to Rs. 4,17,003/-, Rs. 2,35,528/-, Rs. 4,97,834/-, Rs. 1,94,198.92 totalling to Rs. 13,44,563.92 as an expenditure during the year instead of claiming the same in previous years. Therefore, the A.O. was of the opinion ....
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.... set aside to the file of the A.O. 5. The ld. Counsel for the assessee, on the other hand, while supporting the order of the ld. CIT(A) drew the attention of the Bench to the copy of the agreement between MMTC and the assessee (copy of which is placed at paper book pages 1 to 10) and submitted that this is an agreement of joint venture between the assessee and MMTC on 15.10.1999. Referring to Cl. 4 of the said agreement he submitted that MMTC has agreed to make available the four floor premises on "as is where is basis" as their contribution in the said business and the assessee has agreed to pay all costs, charges and expenses for fabricating the business centre by putting up interior works such as putting up cabins, furnishing the same, providing all the necessary infrastructural services for carrying on the business centre. Referring to Cl. 6 of the said agreement, he submitted that the lock in period is 15 years in the slab of 5 years each for 3 slabs. On completion of a period of 5 years from the date of execution of these presents, it will be at the discretion of the party of the second part either to continue the joint venture or to discontinue the said joint venture busine....
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....ted by the ld. Counsel for the assessee reveal that it is a joint venture between the assessee and MMTC to run a business centre. The assessee has not made any changes in the property as per the needs of the tenant rather it has constructed cabins etc. in the premises towards its contribution to the joint venture. Under these circumstances we deem it proper to restore the issue to the file of the A.O. with a direction to decide the issue afresh and in accordance with law. The A.O. shall give due opportunity of being heard to the assessee. The various case laws cited by the assessee, in our opinion, are distinguishable on facts and are not applicable to facts of the present case since in none of the cases cited there is any joint venture agreement where one party contributes the floor space and the other party incurs expenditure for construction of cabins etc. and claimed the entire expenditure as revenue in nature. The ground raised by the Revenue is accordingly allowed for statistical purpose. 7. Ground of appeal No. 3 by the Revenue reads as under:- "The CIT(A) erred in deleting the addition of Rs. 26,39,000/- being the income receivable from Glenmark Laboratories Ltd. and M/s.....
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....he rival arguments made both the parties and perused the orders of the A.O. and the ld. CIT(A). The additional evidences are also admitted. We find the order of the ld. CIT(A) is cryptic on this issue and he has merely deleted the addition on the ground that the A.O. has not brought any material on record for making the disallowance. The various documents filed by the assessee as additional evidence were not considered since these were not filed during the course of assessment proceedings. We therefore deem it proper to restore the issue to the file of the A.O. with a direction to give one more opportunity to the assessee to substantiate its claim. The A.O. shall decide the issue in accordance with law. We hold and direct accordingly. The ground raised by the Revenue is accordingly allowed for statistical purpose. 8. Ground of appeal No. 4 by the Revenue reads as under:- "The CIT(A) erred in deleting the addition of Rs. 2,44,800/- being the prior period expenses incurred during the period 31/12/2003 to 01/01/2004 on conferences held by the assessee company on those days without appreciating the fact that the expenditure did not pertain to the relevant financial year and that the ....
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....me. Referring to the decision of the Hon'ble Gujarat High Court in the case of Saurashtra Cement and Chemical Industries Ltd. Vs. CIT reported in 213 ITR 523 he submitted that where an expense relates to a transaction of an earlier year it does not become a liability payable in the earlier year unless it can be said that the liability was determined and crystallised in the year in question. He accordingly relied on the order of the ld. CIT(A). 8.5 We have considered the rival arguments made both the parties, perused the orders of A.O. and the ld. CIT(A). We have also considered the various decisions cited before us. We find before the ld. CIT(A) the assessee has stated that due to some dispute with Jay Kay Dee Industries Ltd., the bill has been received during this financial year by the assessee. Before the Bench it is the submission of the ld. Counsel for the assessee that over and above the bills for last year this is an additional bill. This fact has not been verified by any of the lower authorities. Therefore, we deem it proper to restore the matter back to the file of the A.O. with a direction to give an opportunity to the assessee to substantiate with evidence that this is a....
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....on with party, frequency of transaction with each other, credit period prevailing in that particular industry and so on. When the payments are made in the subsequent assessment year, the A.O. could have verified such payments before completion of the assessment. He accordingly deleted the addition. 9.4 The ld. D.R. submitted that non-payment of the amount is only one of the reasons for disallowance. However, the A.O. has also observed that the assessee failed to give the complete address of the parties and PAN details etc. The assessee failed to substantiate the nature of expense for which such huge amount has been paid. Therefore, in absence of such details it cannot be said that the expenditure has been incurred for the purpose of business. 9.5 The ld. Counsel for the assessee, on the other hand, referred to paper book page 135 and 136 and drew the attention of the Bench to the ledger account of M/s Doshi Enterprise. Similarly, he referred to paper book pages 137 and 138 and drew the attention of the bench to the ledger account of M/s K.M. Enterprises. Referring to the above he submitted that payments have been made in the subsequent year. 9.6 We have considered the rival argu....
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....by the assessee the ld. CIT(A) deleted the disallowance. Aggrieved with such order of the ld. CIT(A) the Revenue is in appeal before us. 10.3 The ld. D.R. relied on the order of the A.O. 10.4 The ld. Counsel for the assessee, on the other hand, referring to page 140 of the paper book drew the attention of the Bench to the debit note issued by MMTC to the assessee regarding A.C. maintenance charges for the period 20.10. 2004 to 19.10.2005. Referring to page 142 of the paper book, the ld. Counsel for the assessee drew the attention of the Bench to the Invoice raised by Blue Star against MMTC. Referring to Cl. 29 of the agreement, the ld. Counsel for the assessee submitted that the assessee has to make payment on pro-rata basis on account of maintenance charges in respect of elevator, A.C. and fire arms etc. Therefore this being a reimbursement of expenses, no TDS is deductible. He accordingly supported the order of the ld. CIT(A). 10.5 We have considered the rival arguments made both the sides, perused the orders of A.O. and CIT(A) and the paper book filed on behalf of the assessee. After going through the joint venture agreement and copy of debit note issued by MMTC agains....
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.... before the A.O. were also produced before the ld. CIT(A) to substantiate the claim. 11.3 Based on the arguments advanced by the assessee, the ld. CIT(A) deleted the disallowance by observing as under:- "I have carefully considered the facts and submissions as well as gone through the order of the A.O. in the assessment order the A.O. made additions on the presumption that the appellant paid stitching charges more than the cost of cloth but from submission of the appellant it appears that there is no such case. The A.O. misunderstood the details, the bills produced before the A.O. were cloth purchase bills not the stitching bills. The A.O. verified the bills but he did not find any discrepancy regarding genuineness of the bills except a ground that this much purchase of cloth is not understandable, but this can not be reason for disallowance. Therefore, the addition made by the A.O. is deleted. Thus this ground is decided in favour of the appellant." Aggrieved with such order of the ld. CIT(A), the Revenue is in appeal before us. 11.4 The ld. D.R. supported the order of the A.O. 11.5 The ld. Counsel for the assessee, on the other hand, submitted that the assessee is running a....
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....ode of delivery of the said computers since he does not maintain any books of account and failed to produce the payment details, bank statements and various other details as required by the Ward Inspector. He further came to the conclusion that the bills produced by the assessee are bogus and merely sourced from M/s Computer Associates. He accordingly disallowed the claim of depreciation. 12.2 Before the ld. CIT(A) it was submitted that the assessee is not responsible if the third party is not able to prove the transaction with the assessee. It was submitted that for claiming depreciation there is no such condition for making the payment in the same financial year. The copy of the bills, confirmation letter of the party and details of payment made to the party were produced before the ld. CIT(A). 12.3 Based on the arguments made by the assessee the ld. CIT(A) deleted the disallowance of depreciation. While doing so he noted that the A.O. could have verified the payments made to the party in the subsequent year before completion of the assessment. He held that the transaction was genuine, therefore, the disallowance made by the A.O. has to be deleted. 12.4 The ld. D.R. rel....