Case Law Details
DCIT Vs Religare Arts Initiative Ltd (ITAT Delhi)
ITAT Delhi held that unadjusted cenvat credit left on closure on manufacturing unit, which cannot be utilised further, is allowable as business expenditure under section 37(1) of the Income Tax Act
Facts- The case of the assessee was selected for scrutiny. AO completed the assessment u/s. 143(3) of the Income Tax Act disallowing Rs. 1,15,27,945/- out of rental expenses claimed; Rs. 8,01,799/- out of reimbursement/support services; Rs. 1,81,03,975/- being service tax credit written off and disallowance of Rs. 60,16,402/- out of finance cost.
CIT(A) deleted disallowance out of rental expenses, reimbursement/support services, write off of Cenvat Credit and finance cost. Being dissatisfied, revenue has preferred the present appeal.
Conclusion- Held that the impugned disallowance has been made by the Ld. AO due to inadvertent submission of the old rent agreement by the assessee before him. However, revised rent agreement was produced before the Ld. CIT(A) who after allowing opportunity to the Ld. AO to offer his comments gave relief to the assessee, interalia that the revised rent agreement cannot be treated as an afterthought and that the expenditure was incurred wholly and exclusively for the purposes of assessee’s business. We concur with the findings of the Ld. CIT(A) and decline to interfere.
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