TaxTMI 
TaxTMI 
2025 (1) TMI 1705
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.... the case are that the assessee company, engaged in the business of manufacturing and assembling of LPG safe regulators, filed its return of income for the A.Y.2018-19 on 30.10.2018, admitting current year loss of Rs. 2,63,96,264/-. The case was selected for scrutiny and during the course of assessment proceedings, the Assessing Officer called upon the assessee to file necessary evidences, in support of large expenses debited to Profit & Loss account. In response, the assessee, vide letter dated 19.02.2021 filed relevant details including bills and vouchers in support of various expenditure debited to Profit & Loss account. The Assessing Officer, after considering relevant submissions of the assessee observed that although the assessee has ....
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....re and had also deducted TDS. The Assessing Officer has called for agreement with the parties, but the fact remains that the assessee has not entered into any agreement thereto. But, the Assessing Officer simply made additions towards expenditure u/s 69C of the Act. The Ld.CIT(A) after considering the submissions of the assessee and also taking note of evidences filed by the assessee observed that although the assessee has filed bills and vouchers in support of expenditure and also proved that the payments have been made through proper banking channel, but the fact remains that Mr.Giridhar Ghanta has breached trust by deceiving the appellant company and did not render services for which payments were made. Therefore, observed that the expen....
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....ring to the paper book filed by the assessee, more particularly, the expenditure booked towards payment made to Mr.Giridhar Ghanta submitted that the assessee has capitalized the above expenditure in their books of accounts and has only claimed 1/5th of the expenditure and addition if any, needs to be made, then only to the extent of expenditure debited to books of accounts can be made. Therefore, the additions made by the Assessing Officer towards total expenditure should be deleted. In this regard, he relied upon the decision of Hon'ble Delhi High Court in the case of CIT Vs. M/s Radhika Creation in ITA 692/2009, judgement dated 30.04.2010. He has also relied upon the decision of ITAT Delhi Bench in the case of Alexis Global Private L....
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....Act. The Assessing Officer has invoked the provisions of section 69C. In order to invoke section 69C, if any assessee, in any financial year, has incurred any expenditure and the assessee offers no explanation about the source of such expenditure or part thereof or explanation if any offered by him is not in the opinion of the Assessing Officer satisfactory, then section 69 can be invoked. In the preset case, the assessee has incurred expenditure and also recorded such expenditure in the books of accounts and paid the amounts through banking channels after deducting applicable TDS as per law. Therefore, in our considered view, once the assessee explained the nature of expenditure and also records such expenditure, then the provisions of sec....
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.... providers and also proved payment through proper banking channel. Going by the evidences filed by the assessee, in our considered view, the assessee is able to prove the nature of expenditure and also genuineness of the said expenditure. Therefore, we are of the considered view that the reasons given by the Assessing Officer and sustained by the Ld.CIT(A) to disallow expenditure is contrary to the evidence on record. Further, in the case of expenditure towards payment made to Mr.Giridhar Ghanta, because the service provider has not rendered any service and also deceived the company, the assessee had capitalized the expenditure and apportioned over a period of five years and debited 1/5th of the expenditure for the year under consideration.....