Case Law Details
PCIT Vs Anand Divine Developers Private Limited (Delhi High Court)
Introduction: The recent decision of the Delhi High Court in the case of PCIT vs. Anand Divine Developers Private Limited addressed the disallowance of management fees paid to ATS Infrastructure Ltd. This article provides an overview of the case, the grounds of appeal, and the court’s ruling on the deletion of the disallowance.
Detailed Analysis: The appeals (ITA No.749/2023 and ITA No.759/2023) pertain to Assessment Year (AY) 2014-15 and AY 2013-14, respectively. The Income Tax Appellate Tribunal (Tribunal) passed an order on 24.11.2022, which the appellant/revenue sought to challenge.
While there is an acknowledged delay of 187 days in filing the appeals, the court examined the applications for condonation of delay. The reasons provided for the delay, related to processing through official hierarchy and compliance fulfillment, were deemed vague, but the court decided to hear the appeals on merits.
The core issue before the Tribunal was whether the management fees paid by the respondent/assessee to ATS should be added back to the income. In AY 2013-14, the Assessing Officer (AO) disallowed the expenses, but the Commissioner of Income Tax (Appeals) [CIT(A)] deleted the disallowance. The appellant/revenue contested this decision before the Tribunal.
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