Shri Sunil Kumar Bhatia, New Delhi v. ACIT, New Delhi

ITA 1614/DEL/2010 | 2000-2001
Pronouncement Date: 17-11-2011 | Result: Allowed

Appeal Details

RSA Number 161420114 RSA 2010
Assessee PAN AAFPB5064J
Bench Delhi
Appeal Number ITA 1614/DEL/2010
Duration Of Justice 1 year(s) 7 month(s) 4 day(s)
Appellant Shri Sunil Kumar Bhatia, New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 17-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 17-11-2011
Date Of Final Hearing 17-11-2011
Next Hearing Date 17-11-2011
Assessment Year 2000-2001
Appeal Filed On 12-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G DELHI BEFORE SHRI RAJPAL YADAV AND SHRI K.G. BANSAL ITA NO. 1614(DEL)/2010 ASSESSMENT YEAR: 2000-01 SHRI SUNIL KUMAR BHATIA AS SISTANT COMMISSIONER OF INCOME F-50 KOLHAPUR ROAD VS. TAX CENTRAL CIRCLE 17 NEAR KAMLA NAGAR DELHI. NEW DELHI. PAN: AAFPB5064J (APPELLANT) (RESPON DENT) APPELLANT BY : SHRI K.R. MANJANI ADVOCATE RESPONDENT BY: SH RI NIRANJAN KAULI CIT DR DATE OF HEARING : 17.11.2011 DATE OF PRONOUNCEMENT: 17.11.2011. ORDER PER K.G. BANSAL : AM THE ONLY GROUND TAKEN BY THE ASSESSEE IN THIS APP EAL IS TO THE EFFECT THAT THE LD. CIT(APPEALS) ERRED IN NOT ALLOWING T HE DEDUCTION OF RS. 1 87 486/- ON THE GROUND THAT THE ASSESSEE IS NO T ENGAGED IN BUSINESS. 2. THE CASE OF THE LD. COUNSEL FOR THE ASSESSEE B EFORE US IS THAT THE ASSESSEE HAS BEEN CARRYING ON THE BUSINESS OF EXP ORT OF HING FOR A LONG PERIOD. HOWEVER IN THIS YEAR NO EXPORT WAS MAD E. IN RESPECT OF PURCHASES OF EARLIER YEAR THE ASSESSEE HAD TO PAY AMOUNT OF RS. ITA NO. 1614(DEL)/2010 2 1 87 486/- REPRESENTING ADDITIONAL LIABILITY ARISI NG ON ACCOUNT OF FLUCTUATION IN RATE OF FOREIGN EXCHANGE. THE ASSESSEE CARR IED ON THIS BUSINESS EVEN IN SUBSEQUENT YEARS. HOWEVER THE LOWER AUTHO RITIES DISALLOWED THIS EXPENDITURE ON THE GROUNDS THAT THIS EXPENDITURE DOES NOT PERTAIN TO THIS YEAR AND NO BUSINESS OF HING HAS BEEN CARRIED ON I N THIS YEAR. HIS CASE IS THAT THE LIABILITY CRYSTALLIZED IN THIS YEAR O N ACTUAL PAYMENT. FURTHER THIS YEAR WAS THE LULL PERIOD IN THE BUSINESS AS IT CONTINUED IN SUBSEQUENT YEARS ALSO. 3. IN REPLY THE LD. DR REFERRED TO THE STATEM ENT OF INCOME WHICH SHOWS A DEDUCTION OF RS. 1 87 486/- ARISING ON AC COUNT OF IMPORT OF HING ON 31.03.1994 AGAINST WHICH THE AMOUNT WAS PAID O N 08.06.1999. IT IS HIS CASE THAT THE TRANSACTION OF PURCHASE DOES NOT P ERTAIN TO THIS YEAR AND AS SUCH NO SALE AND PURCHASE OF HING IS SHOWN IN T HIS YEAR. THEREFORE IT IS ARGUED THAT THE AMOUNT CANNOT BE ALLOWED TO THE ASSESSEE IN THE PROCEEDINGS OF THIS YEAR. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. IT IS AN ADMITTED FACT THAT THE AS SESSEE HAD BEEN CARRYING ON THIS BUSINESS IN EARLIER YEARS AND ALSO CARRIED ON THIS BUSINESS IN ITA NO. 1614(DEL)/2010 3 SUBSEQUENT YEARS. THIS LEADS TO A CLEAR INFEREN CE THAT THE INSTANT YEAR WAS A LULL PERIOD IN THE BUSINESS AND IT IS NOT A CASE OF ABANDONMENT OF THE BUSINESS ALTOGETHER. IN SUCH A SITUATION BUSINES S EXPENSES WILL HAVE TO BE ALLOWED IN COMPUTING THE TOTAL INCOME. THE FAC TS MENTIONED ABOVE ALSO SHOW THAT PAYMENT IN RESPECT OF STOCK-IN-TRADE PU RCHASED ON 31.03.1994 WAS MADE ON 08.06.1999 AT RS. 7 20 126/-. THE I NCREASE IN PRICE HAPPENED DUE TO FLUCTUATION IN RATE OF FOREIGN EXCHANGE. SINCE THE LOSS WAS INCURRED IN RESPECT OF STOCK-IN-TRADE AND IT GOT DETERMINED AT THE TIME OF PAYMENT IN THIS YEAR WE ARE OF THE VIEW THAT TH E EXPENDITURE IS REVENUE EXPENDITURE AND IT IS ALLOWABLE IN THE COMPUTATIO N OF TOTAL INCOME FOR THIS YEAR. 5. IN THE RESULT THE APPEAL IS ALLOWED. SD/- SD/- (RAJPAL YADAV) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA COPY OF THE ORDER FORWARDED TO:- 1. SHRI SUNIL KUMAR BHATIA NEW DELHI. 2. ACIT CENTRAL CIRCLE 17 NEW DELHI. 3. CIT 4. CIT(A) 5. THE DR ITAT NEW DELHI. ASSISTANT REGISTRAR.