Case Law Details
Bigfoot Retail Solution Pvt. Ltd. Vs ACIT (ITAT Delhi)
It is observed that the assessee submitted before the Ld. AO/CIT(A) that all telephones are either installed at office premises or used by officers and the employees of the assessee company and that usage of telephone/internet is done by employees for official purposes only. It was also submitted that the impugned expenses were incurred in the course of business of the assessee company and that it was not in the nature of personal expenditure. We agree with the above contentions of the assessee. The Ld. AO/CIT(A) made the observation that there was twelve times increase in the expenditure as compared to the preceding year which is disproportionate but that alone cannot be the basis of disallowance. Genuineness of the expenditure has not been doubted. Moreover, the increase in revenue from Rs. 1,21,78,271/- in the last year to Rs. 5,64,16,108/- in this year has been overlooked by both Ld. AO and Ld. CIT(A).
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
The appeal by the assessee is directed against the order dated 27.02.2019 of the Ld. Commissioner of Income Tax (Appeals)- 2, New Delhi (“CIT(A)”) pertaining to the assessment year (“AY”) 2015-16.
2. The assessee is a company engaged in the business of providing IT enabled and BPO services. It filed its return for AY 2015-16 on 15.09.2015 declaring loss of Rs. 2,20,29,872/-. The case was selected for scrutiny through CASS. The assessment was completed on 11.09.2017 under section 143(3) of the Income Tax Act, 1961 (“the Act”) on net loss of Rs. 39,03,530/- resulting in addition of Rs. 9,95,086/- under section 56(2)(viib); addition of Rs. 6,82,055/- due to difference in TDS between ITR and 26AS;
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