AT & T Communication Services India Private Limited Vs ACIT (ITAT Delhi)
Learned AR for the taxpayer contended that since the contract with “In Time” was terminated before commencement of the lease period, 50% of the security deposit forfeited by In Time was written off in the books of account in the financial year 2009-10; that since the loss on account of forfeiture of the deposit is occurred in the course of business, it is revenue in nature and that the taxpayer has been regularly carrying out its business activities from various premises through-out the company and the said agreement was terminated due to genuine business consideration.
Held: We are of the considered view that depositing the security deposit for taking the office space on lease by the taxpayer and subsequently terminating the agreement due to business consideration is a business decision which cannot be questioned by the Revenue.
FULL TEXT OF THE ITAT JUDGMENT
The Appellant, M/s. AT & T Communication Services India Pvt. Ltd. (hereinafter referred to as ‘the taxpayer’) by filing the present appeal sought to set aside the impugned order dated 29-1-2015, passed by the assessing officer in consonance with the orders passed by the learned DRP/TPO under section 143(3) read with section 144C of the Income Tax Act, 1961 (for short ‘the Act’) qua the assessment year 2010-11 on the grounds inter alia that :–
“On the facts and circumstances of the case and in law, the Hon’ble Dispute Resolution Panel-I, Delhi (‘DRP’) has, vide order passed under section 144C(5) of the Income Tax Act, 1961 (‘Act’), erred in confirming the adjustments proposed by the Assistant Commissioner of Income Tax, Circle 2(1), New Delhi (‘DCIT’) in the draft assessment order dated 24-3-2014 and the Assistant Commissioner of Income Tax, Circle 3(2), New Delhi (‘learned AO’) has therefore, erred in making additions/disallowances in the final assessment order dated 29-1-2015 passed under section 143(3) read with section 144C of the Act.
Each of the ground is referred to separately, which may kindly be considered independent of each other.
