COMMISSIONER OF INCOME TAX vs. M/S HIGHWAY CYCLES INDUS. LTD.

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ITA/370/2008HC Punjab & HaryanaPHHC01080355200825 April 2016Author: MR. JUSTICE JASPAL SINGH,MR. JUSTICE HEMANT GUPTA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal as not pressed. The Revenue's counsel stated that they did not wish to press the appeal in view of CBDT circulars concerning tax effect thresholds. The court granted liberty to the revenue to file an application for revival of the appeal if something survived therein. It was clarified that the withdrawal of the appeal by the revenue would not be taken as an affirmation of the ITAT's order on merits, and the legal issue was left open for adjudication in an appropriate case. The specific finding of the ITAT on the deletion of expenditure was not adjudicated upon by the High Court.

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 22.05.2007 passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench. The appeal pertained to the assessment year 1997-98. The dispute involved the deletion of an expenditure of ₹2,86,234/- by the ITAT, which was incurred on foreign travel of directors' wives for non-business purposes. The High Court of Punjab and Haryana at Chandigarh heard the appeal.

What were the issues?

1. Whether, on the facts and in law, the ITAT was justified in deleting ₹2,86,234/- being expenditure incurred on the foreign travels of the directors' wives for non-business purposes? The Revenue contended that the expenditure was not for business purposes and therefore should not have been allowed. The Revenue's counsel, however, did not wish to press the appeal due to the tax effect being less than ₹20 lacs, citing CBDT Circular No. 21/2015 and Circular No. 279/Misc/M-142/2007-ITJ (Part). The assessee's contentions were 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: 25.04.2016 Commissioner of Income Tax, Ludhiana-II .......Appellant Versus M/s Highway Cycles Industries Ltd. ......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 22.5.2007 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (A), in ITA No. 813/Chandi/2006, for the assessment year 1997-98, raising the following substantial question of law: Whether on the facts and in Law the ITAT was justified in law in deletion of ` 2,86,234/- being expenditure incurred on the foreign Travels of the director's wives for the purposes of non business purposes? REEMA SAINI 2016.04.26 14:44 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) 25.04.2016 JUDGE reema REEMA SAINI 2016.04.26 14:44 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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