Case Law Details
Yala Construction Co. Pvt Ltd Vs ACIT (ITAT Delhi)
Yala Construction Co. Pvt Ltd appealed against the order of ld. CIT(A)-28, New Delhi dated 25.06.2019, contesting various disallowances made by the Learned Assessing Officer (‘Ld. AO’). The appeal encompasses a range of issues, including depreciation, interest on loan, commission, and sponsorship fee. This article provides a detailed analysis of the case and the final verdict rendered by the Income Tax Appellate Tribunal (ITAT) Delhi.
Detailed Analysis
1. Depreciation Disallowance: The dispute arose regarding the depreciation claimed on a slurry machine imported by the assessee. While the AO disallowed it due to perceived delays in putting the machine to use, ITAT Delhi, upon reviewing documentary evidence, ruled in favor of the assessee, allowing the depreciation claim.
2. Commission Disallowance: The AO disallowed commission paid by the assessee to a service provider, citing lack of documentation and nexus between the commission paid and services rendered. Despite the AO’s stance, ITAT Delhi allowed the commission as a legitimate business expenditure, considering the agreements and explanations provided by the assessee.
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