COMMISSIONER OF INCOME TAX-II, LUDHIANA. vs. M/S ROCKMAN CYCLES INDUSTRIES LTD.

ITA/653/2008HC Punjab & HaryanaPHHC01080665200802 May 20162 pages

AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeal as not pressed. The Revenue's counsel submitted that in view of CBDT circulars No. 21/2015 dated 10.12.2015 and No. 279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, the appeal was not being pressed as the tax effect involved was less than ₹ 20 lacs. The Court granted liberty to the revenue to file an application for revival of the appeal if something survived therein. The Court clarified that the withdrawal of the appeal by the revenue would not be taken as an affirmation of the Tribunal's order on merits, and the legal issues were left open to be adjudicated in an appropriate case. No finding was given on the merits of the two questions of law.

What were the facts?

The Revenue, Commissioner of Income Tax, Ludhiana-II, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 16.10.2007 passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench (A). The appeal pertained to Assessment Year 2001-02 and challenged the ITAT's deletion of additions made by the Assessing Officer. The amount in dispute was not explicitly stated for the entire appeal but related to specific additions. The procedural history involves the ITAT's order being challenged before the High Court.

What were the issues?

The Tribunal had to decide two substantial questions of law: 1. Whether on the facts and in law the ITAT was justified in deleting the addition of ₹ 4,30,474/- being expenditure incurred on the foreign travel of the director's spouses for non-business purpose? (Question of law and fact, concerning the allowability of expenditure). 2. Whether on the facts and in the circumstances of the case ITAT was justified in law in deleting the addition of ₹ One lakh on account of estimating the value of closing stock of consumable store, machinery repair etc? (Question of law and fact, concerning estimation of stock and expenses). The Revenue did not press the appeal. The Assessee's arguments are not recorded as the appeal was not pressed by the Revenue.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 02.05.2016 Commissioner of Income Tax, Ludhiana-II .......Appellant Versus M/s Rockman Cycle Industries Limited ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Mr. Zora Singh Klar, Advocate for the appellant. Mr. Alok Mittal, Advocate for the respondent. RAJESH BINDAL,J. This appeal has been filed under Section 260 A of the Income Tax Act, 1961 (for short 'the Act'), against the order dated 16.10.2007 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (A), in ITA No. 927/Chandi/2006, for the assessment year 2001-02, raising the following substantial questions of law: (i) Whether on the facts and in law the ITAT was justified in deleting the addition of ` 4,30,474/- being expenditure incurred on the foreign travel of the director's spouses for non-business purpose? (ii) Whether on the facts and in the circumstances of the case ITAT was justified in law in deleting the addition of ` One lakh on account of estimating the value of closing stork of consumable store, machinery repair etc? REEMA SAINI 2016.05.03 11:16 I attest to the accuracy and authenticity of this document High Court, Chandigarh -2- Learned counsel for the appellant-revenue submitted that in view of circular No.21/2015 dated 10.12.2015 read with circular No.279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by Central Board of Direct Taxes, he does not wish to press the present appeal, as the tax effect involved is less than ` 20 lacs. However, he prays that liberty be granted to the revenue to file an application for revival of the appeal in case something survives therein. Dismissed as not pressed with liberty as prayed for. It is however, clarified that withdrawal of the appeal by the revenue shall not be taken as affirmation of order of the Tribunal on merits. The legal issue as claimed by the revenue is left open to be adjudicated in an appropriate case. (RAJESH BINDAL)

JUDGE (HARINDER SINGH SIDHU) 02.05.2016 JUDGE reema REEMA SAINI 2016.05.03 11:16 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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