- (1.) This appeal under Section 260A of the Income-tax Act, 1961 (for short ''the Act'') has been filed by the Revenue against the order dated December 31, 2009, passed by the Income-tax Appellate Tribunal, Delhi Bench ''B'', New Delhi (in short ''the Tribunal'') in I.T. A. No. 313/Del/2009, relating to the assessment year 2004-05.
(2.) The following substantial questions of law have been claimed for determination by this Court: (1) Whether on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal was right in deleting the addition of Rs. 13,88,866 made on account of operational expenses by the Assessing Officer after invoking Section 145 of the Income-tax Act, 1961 and bringing on record the defect that the Assessee is not maintaining mercantile system regarding the receipts of management charges and, thereafter, estimating the income on the basis of previous record of the Assessee and whether the Income-tax Appellate Tribunal was right in holding that no defect has been brought on record by the Assessing Officer ? (2) Whether on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal was right in law in upholding the order of the learned Commissioner of Income-tax (Appeals) in deleting the addition of Rs. 2,73,680 made by the Assessing Officer on account of rebate and discount even though the genuineness of these expenses were not established ?
(3.) The facts, in brief, necessary for adjudication, as narrated in the appeal, are that the Respondent-Assessee filed its return of income for the assessment year 2004-2005, on November 1, 2004 declaring loss of Rs. 29,81,221. The assessment was completed under Section 143(3) of the Act, vide order dated December 22, 2006 at a loss of Rs. 12,75,130 in which many additions were made and certain deductions were disallowed. As regards the operational receipts and expenses, the Assessing Officer held that the genuineness of the claim of the operational expenses was not established and the correct profit or loss from business could not be ascertained from the receipts and expenses shown during the year. The Assessing Officer, therefore, rejected the book result shown by the Assessee, under Section 145 of the Act. In so far as the rebate and discount expenses are concerned, the Assessing Officer held that since the genuineness of those expenses was not established, the expenses claimed by the Assessee amounting to Rs. 2,73,680 were not allowable.;