A C I T CENTRAL-I JODHPUR vs. SHRI KARAN SINGH KHICHI

ITA/128/2010HC RajasthanRJHC01023953200810 May 20172 pages

AI SummaryDismissed

What did the High Court hold?

The Tribunal's finding was founded on an adequate examination of facts and law. The deduction of Rs.30,00,000/- represented amounts incurred by the assessee in development of parks, drainage, roads, temple, and boundary wall, which were contractual liabilities. The assessee was obligated to satisfy these liabilities. Therefore, the Revenue's plea was not sustainable. The Tribunal rightly allowed the deduction claimed by the assessee for Rs.30 Lacs. The appeal is dismissed.

What were the facts?

The appeal concerns the assessment year 2001-02. The appellant is the Assistant Commissioner of Income Tax, Central-1, Jodhpur (Revenue), and the respondent is Shri Karan Singh Khichi, Director of M/s. Ashapurna Buildcon (assessee). The Revenue is challenging an order dated 30.9.2007 passed by the Income Tax Appellate Tribunal, Jodhpur Bench, in ITA No.120/JDPR/2007. The Tribunal had dismissed the Revenue's appeal and allowed the assessee's cross-objection, specifically allowing a deduction claimed by the assessee amounting to Rs.30,00,000/-. The Revenue contends that the Tribunal erred in allowing the deduction without proper examination.

What were the issues?

1. Whether the Tribunal was justified in dismissing the Revenue’s appeal and allowing the assessee’s cross objection? (Question of law and fact) 2. Whether the Tribunal was justified in allowing the deduction claimed by the assessee amounting to Rs.30,00,000/- and if so, whether the grounds allowing the deduction are legally sustainable? (Question of law and fact, concerning the provision for deduction of expenditure) Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Tribunal erred in accepting the assessee's appeal without examining whether expenditure to execute contractual liability could be allowed on an accrual basis even if not actually incurred, provided it was part of the contract and would be subsequently utilized for the stated purpose.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Income Tax Appeal No. 128 / 2010 Assistant Commissioner of Income Tax, Central-1, Jodhpur. ----Appellant Versus Shri Karan Singh Khichi, Director, M/s. Ashapurna Buildcon, Near Circuit House, Jodhpur. ----Respondent _____________________________________________________ For Appellant(s) : Mr. KK Bissa For Respondent(s) : Mr. Lalit Pareek _____________________________________________________ HON'BLE MR. JUSTICE GOVIND MATHUR HON'BLE MR. JUSTICE VINIT KUMAR MATHUR

Judgment 10/05/2017

This appeal is before us to question correctness of order ated 30.9.2007 passed by learned Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur in ITA No.120/JDPR/2007 for the assessment year 2001-02. The questions before us for consideration are as follows :- “(1) Whether the Tribunal was justified in dismissing the Revenue’s appeal and allowing assessee’s cross objection ? (2) Whether the Tribunal was justified in allowing the deduction claimed by the assessee amounting to Rs.30,00,000/- and if so, whether grounds allowing deduction is legally sustainable.?”

(2 of 2) [ITA-128/2010] It is submitted by learned counsel appearing on behalf of Revenue that the Tribunal grossly erred while accepting the appeal preferred by the assessee without examining the fact that the expenditure to execute contractual liability could have been allowed on accrual basis basis even if the same has not been actually incurred only if that was a part of contract and would have been subsequently utilized for the purpose given. From perusal of order passed by the Income Tax Appellate Tribunal, it is apparent that the finding arrived is founded on adequate examination of facts and law. The deduction claimed by the assessee is nothing but the amount that incurred in development of parks, drainage, roads, temple and boundary wall etc. These were the contractual liabilities of the assessee. The assessee was under an obligation to satisfy all these contractual liabilities and, therefore, the plea taken by the Revenue is not sustainable. The appeal, as such, deserves to be dismissed with the finding that the Tribunal rightly allowed the deductions claimed by the assessee for an amount of Rs.30 Lacs. (VINIT KUMAR MATHUR)J. (GOVIND MATHUR)J. Sanjay

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