CIT, CHANDIGARH vs. M/S RPS HOTELS PVT. LTD.

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ITA/349/2007HC Punjab & HaryanaPHHC01073044200712 March 2008Author: MR JUSTICE RAKESH KUMAR GARG,MR. JUSTICE SATISH KUMAR MITTAL2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The Court noted that a similar appeal (ITA No.496 of 2005) with a similar question of law and on similar facts had already been dismissed by the same Court by a judgment of even date. Following the reasoning in that previous judgment, the Court found no ground to interfere with the order of the Tribunal. Consequently, the Court held that no substantial question of law arose for its determination. The operative direction was the dismissal of the appeal.

What were the facts?

The Revenue, Commissioner of Income Tax-II, Chandigarh, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench 'B', dated September 22, 2005. The appeal pertained to Assessment Year 2000-01 and concerned an order passed by the ITAT. The dispute involved the food cost ratio applied to the assessee, M/s R.P.S. Hotels (P) Ltd., Chandigarh. The Assessing Officer had based his order on the results of 16 hotels/restaurants, while the CIT(A) had restricted the food cost ratio to 53% based on conjectures and surmises without evidence.

What were the issues?

1. Whether on the facts and in the circumstances of the case and in law, the order of the ITAT is perverse as the ITAT has failed to appreciate that the CIT(A) restricted the food cost ratio to 53% only on conjectures and surmises and without any evidence, whereas the Assessing Officer had based its order on the basis of results of 16 hotels/restaurants. (Question of law) Contentions: Assessee: Not recorded in the judgment. Revenue: Argued that the ITAT's order was perverse because the CIT(A) had restricted the food cost ratio to 53% without evidence, relying on conjectures and surmises, whereas the Assessing Officer's assessment was based on the results of 16 other hotels/restaurants.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

In the High Court for the States of Punjab and Haryana at Chandigarh … Date of decision:12.3.2008 The Commissioner of Income Tax -II,Chandigarh

Appellant Versus M/s R.P.S.Hotels(P) Ltd. Chandigarh .. Respondent Coram: Hon’ble Mr.Justice Satish Kumar Mittal Hon'ble Mr.Justice Rakesh Kumar Garg Present: Mr.S.K.Garg Narwana,Advocate for the Revenue-appellant. Ms.Karnika Bhurjee, Advocate for Ms.Radhika Suri, Advocate for the respondents. Rakesh Kumar Garg,J

The Revenue has filed the present Appeal under Section 260A of the Income Tax Act, 1961(for short ‘the Act’) against the order of the Income Tax Appellate Tribunal, Chandigarh , Bench ‘B’ Chandigarh (for short ‘the Tribunal’), dated 22.9.2005 passed in ITA No.26/CHANDI/2004 for the Assessment Year 2000-01 raising the following substantial question of law: - “Whether on the facts and in the circumstances of the case and in law, the order of the ITAT is perverse as the ITAT has failed to appreciate the fact that the CIT(A)

restricted the food cost ratio to 53 % only on conjectures and surmises and without any evidence, whereas the Assessing Officer had based its order on the basis of results of 16 hotels/restaurants.” ITA No.496 of 2005 in which similar question of law on similar facts was raised by the Revenue has been dismissed by this Court by judgment of even date. Following the same reasoning, we find no ground to interfere in the order of the Tribunal. No question of law arises in this appeal for our determination. Dismissed. (RAKESH KUMAR GARG) JUDGE March 12,2008 (SATISH KUMAR MITTAL) nk JUDGE

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