CIT FARIDABAD vs. M/S G.E.MOTORS INDIA LTD.

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ITA/449/2009HC Punjab & HaryanaPHHC01084557200902 April 2012Author: MR. JUSTICE M.M. KUMAR,MR. JUSTICE ALOK SINGH3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The Court noted that the matter was no longer res integra, as similar questions of law had been raised in other appeals involving the same assessee, which were dismissed by a Division Bench of the High Court on January 25, 2011, in ITA No. 387 of 2009. In that judgment, the Division Bench had held that no substantial question of law arose. The High Court found that the learned counsel for the appellant (Revenue) had not been able to point out any illegality or perversity in the findings recorded by the Commissioner of Income Tax (Appeals) as upheld by the Tribunal. Therefore, for the sake of consistency, the instant appeal was dismissed in terms of the aforementioned Division Bench judgment. The operative direction was the dismissal of the appeal.

What were the facts?

The Revenue (Commissioner of Income Tax, Faridabad) filed an appeal under Section 260A of the Income-tax Act, 1961, against an order dated January 23, 2009, passed by the Delhi Bench 'I' of the Income Tax Appellate Tribunal (ITAT). The appeal pertained to the assessment year 2001-02 and concerned several disputed amounts. The High Court heard the revenue's counsel. The court noted that similar questions of law had been raised in other appeals (ITA Nos. 288, 387, and 439 of 2009) involving the same assessee, M/s G.E. Motors India Ltd., Faridabad. These appeals were dismissed by a Division Bench of the High Court on January 25, 2011, holding that no substantial question of law arose. The revenue's counsel in the present appeal could not point out any illegality or perversity in the findings of the CIT(A) as upheld by the ITAT.

What were the issues?

The Tribunal had to decide the following questions of law: 1. Whether the ITAT was correct in allowing expenditure as revenue in nature for payments made to CRISIL (`1,39,932/-) and for filing a compensation application for a new imported lacing machine (`31,000/-), when these were allegedly capital expenditures not allowable under Section 37 of the Income Tax Act, 1961. 2. Whether the ITAT was correct in confirming the CIT(A)'s deletion of an addition of `7,58,410/- made by the Assessing Officer on account of staff welfare expenses, despite the expenditure allegedly not being incurred wholly and exclusively for business purposes. 3. Whether the ITAT was correct in confirming the CIT(A)'s holding that receipts on account of unclaimed balances, profit on exchange fluctuations, and miscellaneous income do not fall under clause (bba) of the Explanation to Section 80HHC. 4. Whether the ITAT was correct in deleting the addition made by the Assessing Officer on account of disallowance from vehicle and telephone expenses, given the alleged failure of the assessee to establish that these were incurred wholly and exclusively for business purposes and the possibility of personal use, contravening decisions in CIT v. Chitram and Co. (P) Ltd. and CIT v. Madura Coats Ltd. The Revenue contended that the expenditures in question were capital in nature or not incurred exclusively for business. The Assessee's contentions are not explicitly recorded in the provided text, beyond the ITAT's decision being upheld.

Which sections of the Income-tax Act were involved?

Section 260A,Section 37,Section 80HHC

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

Date of Decision: April 2, 2012 Commissioner of Income Tax, Faridabad …Appellant Versus M/s G.E. Motors India Ltd., Faridabad …Respondent CORAM: CORAM: CORAM: CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE M.M. KUMAR

HON’BLE MR. JUSTICE HON’BLE MR. JUSTICE HON’BLE MR. JUSTICE HON’BLE MR. JUSTICE ALOK SINGH ALOK SINGH ALOK SINGH ALOK SINGH Present: Mr. Tejinder K. Joshi, Advocate,

for the appellant.

1.

To be referred to the Reporters or not?

2.

Whether the judgment should be reported in the Digest?

1.

The revenue has filed the instant appeal under Section 260A of the Income-tax Act, 1961 (for brevity, ‘the Act’) against the order dated 23.1.2009, passed by the Delhi Bench ‘I’ of the Income Tax Appellate Tribunal (for brevity, ‘the Tribunal’) relating to the assessment year 2001-02. The following questions of law have been sought to be raised:- “I. Whether on the facts and in the circumstances of the case, the ITAT was right in law in allowing the expenditure as revenue in nature in respect of payment made to CRISIL amounting to `1,39,932/- and payment made for filing of compensation application in respect of new imported lacing machine amounting to `31,000/- even though these were capital expenditure and were not allowable under Section 37 of the Income Tax Act, 1961, being capital in nature? II. Whether on the facts and in the circumstances of the case, the ITAT was right in law in confirming the order of the CIT(A) in deleting the addition of `7,58,410/- made by the Assessing Officer on account of staff welfare expenses disregarding the fact that the expenditure was not incurred wholly and exclusively for the business purposes? III. Whether on the facts and in the circumstances of the case, the ITAT was right in law in confirming the order of the CIT(A) in holding that the receipts of the assessee on account of unclaimed balances, profit on exchange fluctuations and Misc. income do not fall in clause (bba) of Explanation to section 80HHC? IV. Whether on the facts and in the circumstances of the case, the ITAT was right in law in deleting the addition made by the Assessing Officer on account of disallowance out of vehicle and telephone expenses even though the assessee had failed to establish that the same were incurred wholly and exclusively for the business purposes and the possibility of personal use cannot be ruled out and in contravention of the decision of Madras High Court in the case of CIT v. Chitram and Co. (P) Ltd., 191 ITR 96 and CIT v. Madura Coats Ltd., 263 ITR 241?”

2.

We have heard learned counsel for the revenue- appellant at some length and are of the view that the matter is no longer res integra. In the case of the assessee-respondent, the revenue has filed ITA Nos. 288, 387 and 439 of 2009 raising similar questions of law and the Division Bench of this Court dismissed the appeals vide judgment dated 25.1.2011 rendered in ITA No. 387 of 2009, holding that no substantial question of law as claimed arises.

3.

In the instant appeal also learned counsel for the appellant has not been able to point out any illegality or perversity in the findings recorded by the CIT(A) as upheld by the Tribunal. Therefore, for the sake of consistency the instant appeal is dismissed in terms of the Division Bench judgment, dated 25.1.2011, rendered in ITA No. 387 of 2009. (M.M. KUMAR) (M.M. KUMAR) (M.M. KUMAR) (M.M. KUMAR) JUDGE JUDGE JUDGE JUDGE

(ALOK SINGH ALOK SINGH ALOK SINGH ALOK SINGH) April 2 April 2 April 2 April 2, 2012 , 2012 , 2012 , 2012

JUDGE JUDGE JUDGE JUDGE Pkapoor

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