COMMISSIONER OF INCOME TAX vs. M/S HIGHWAY CYCLES INDUS. LTD.
What did the High Court hold?
The High Court dismissed the appeal as not pressed. The Revenue's counsel submitted that in view of the CBDT circulars regarding tax effect, they did not wish to press the appeal. 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 issue was left open to be adjudicated in an appropriate case. The specific finding of the ITAT on the deletion of expenditure is not detailed in this High Court judgment, nor is the reasoning behind it. The operative direction was the dismissal of the appeal as not pressed, with liberty to revive.
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 ITAT's order pertained to the assessment year 1996-97 and concerned the deletion of an expenditure of ₹2,02,891/-. This expenditure was related to foreign travel of the assessee's (M/s Highway Cycles Industries Ltd.) directors' wives, which the Revenue contended was for non-business purposes. The appeal was filed before the High Court of Punjab and Haryana at Chandigarh.
What were the issues?
1. Whether, on the facts and in law, the ITAT was justified in deleting an expenditure of ₹2,02,891/- incurred on the foreign travel of the directors' wives for non-business purposes? The Revenue argued that the expenditure was for non-business purposes and should not have been deleted. The Revenue relied on Circular No. 21/2015 dated 10.12.2015 and Circular No. 279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by the Central Board of Direct Taxes, stating that the tax effect involved was less than ₹20 lacs. The Revenue did not wish to press the appeal based on these circulars. The judgment does not record any specific arguments from the assessee's side regarding the merits of the deletion.
Which sections of the Income-tax Act were involved?
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. 812/Chandi/2006, for the assessment year 1996-97, raising the following substantial question of law: Whether on the facts and in Law the ITAT was justified in law in deletion of ` 2,02,891/- 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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