Case Number: ITA 3036/DEL/2022
Appellant: DSV Coload & Clearance Pvt. Ltd., New Delhi
Respondent: DCIT, Circle-7(1), New Delhi
Assessment Year: 2016-17
Case Filed On: 2022-12-28
Order Type: Final Tribunal Order
Date of Order: 2023-06-20
Pronounced On: 2023-06-20
In the case of DSV Coload & Clearance Pvt. Ltd. vs. DCIT, Circle-7(1), New Delhi, the appellant, DSV Coload & Clearance Pvt. Ltd., challenged the disallowance of various expenses for the assessment year 2016-17. The case was heard by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘SMC’ on 18th May 2023, with the final order pronounced on 20th June 2023.
The appeal arose from the order passed by the National Faceless Appeal Centre (NFAC) dated 3rd November 2022. The appellant was represented by Sh. Harpreet Singh Ajmani, Adv., while the respondent was represented by Sh. Om Parkash, Sr. DR. The primary grievance of the appellant was the disallowance of various expenses, including miscellaneous expenses, office maintenance expenses, audit fees, and sundry creditors.
The appellant raised several grounds of appeal:
The ITAT bench, comprising Dr. B. R. R. Kumar (Accountant Member), decided on each issue as follows:
The assessee irrevocably wrote off the security deposit of Rs. 1,14,045 pertaining to BSES and S. R. Cellular Phone Ltd. for their old office. The ledger depicting this fact was duly reproduced, and the amount was treated as allowable.
The AO disallowed Rs. 1.92 lacs on account of office maintenance expenses due to a lack of bills. However, the details were duly filed, and the bills were part of the submissions made before the revenue authority, which were not considered during the assessment proceedings. The expenses were not claimed in any other year, so the disallowance was directed to be deleted.
The AO disallowed Rs. 10.92 lacs claimed by the assessee as consultancy and professional fees because the bills were raised in December 2016 and were not considered to pertain to the FY 2015-16. It was brought to notice that the bills were received during the year, but the services were rendered for the current Assessment Year. These expenses were not claimed in any other year, so the disallowance was directed to be deleted.
The AO disallowed Rs. 12.49 lacs on account of sundry creditors. The amounts were subsequently paid in March 2016 and May 2016, and evidence was placed on record. Thus, the addition made on account of sundry creditors was directed to be deleted.
As a result, the appeal of the assessee was allowed.
The ITAT’s decision emphasizes the importance of accurate verification of expenses and the need for a thorough review of submitted evidence before making disallowances. It ensures that the appellant is given a fair opportunity to present evidence and correct any errors in their filings.
Order Pronounced: In the open court on 20th June 2023.
Bench: Dr. B. R. R. Kumar, Accountant Member
Copy forwarded to:
Date of Hearing: 18th May 2023
Date of Order: 20th June 2023
The appellant, DSV Coload & Clearance Pvt. Ltd., filed an application on 28th December 2022 against the order dated 3rd November 2022 by the NFAC, challenging the disallowance of various expenses for the assessment year 2016-17.
The tribunal considered the appellant’s arguments and decided to remit the issues back to the AO for verification and fresh adjudication, ensuring that the appellant is given an adequate opportunity to present their case.
The tribunal’s decision underscores the importance of due process and fairness in tax assessments, allowing taxpayers to correct errors and provide necessary documentation to substantiate their claims.
Overall, the ITAT’s order serves as a reminder of the importance of accurate and fair assessment procedures in tax matters, ensuring that all parties are given a fair chance to present their case and that decisions are made based on thorough verification and consideration of all relevant facts.
DSV Coload & Clearance Pvt. Ltd. vs. DCIT, Circle-7(1), Disallowance of Expenses for AY 2016-17
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