C I T vs. M/S PORRITTS AND SPENCER

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ITA/224/2008HC Punjab & HaryanaPHHC01080193200831 July 2009Author: MR. JUSTICE ADARSH KUMAR GOEL,MRS JUSTICE DAYA CHAUDHARY3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court disposed of the appeal based on its previous decisions. For question (i), concerning the foreign tour of the MD's wife, the court noted that the ITAT had allowed 50% of the claim, not the whole, and that this issue was covered in favour of the assessee by the High Court's order dated 30.7.2007 in ITA No.220 of 2007 (CIT vs. M/s Porrits & Spencers (Asia) Limited, Faridabad). For question (ii), regarding commission paid to the Managing Director and Executives, the court stated that this was covered by its order dated 5.3.2009 in ITA No.540 of 2006 (CIT v. M/s Porrits & Spencer (A) Limited, Faridabad), in favour of the assessee. Similarly, for question (iii), concerning the personal use of the car, the court held that it was covered in favour of the assessee by its order dated 5.3.2009 in ITA No.38 of 2008 (CIT v. M/S Porrits and Spencers Limited). The appeal was disposed of accordingly, implying the revenue's appeal was dismissed on these grounds.

What were the facts?

The Commissioner of Income Tax, Faridabad (the revenue) filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order dated 23.2.2007 passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench 'A'. The appeal pertains to assessment year 1997-98 and challenges the ITAT's confirmation of the Commissioner of Income Tax (Appeals) [CIT(A)] orders. The ITAT had deleted disallowances made by the Assessing Officer (AO) concerning the foreign tour of the Managing Director's wife (Rs. 3,14,809), commission paid to the Managing Director and executives (Rs. 9,20,591), and personal use of a car (Rs. 4,32,155). The High Court noted that the parties agreed on how the substantial questions of law should be decided.

What were the issues?

The High Court was asked to decide the following substantial questions of law: 1. Whether the ITAT erred in law by confirming the CIT(A)'s deletion of the AO's disallowance of Rs. 3,14,809 on account of the Managing Director's wife's foreign tour, under Section 37 of the Act. 2. Whether the ITAT erred in law by confirming the CIT(A)'s deletion of the AO's disallowance of Rs. 9,20,591 on account of commission paid to the Managing Director and Executives, under Section 37 of the Act. 3. Whether the ITAT erred in law by confirming the CIT(A)'s deletion of the AO's disallowance of Rs. 4,32,155 on account of the personal use of a car, under Section 37 of the Act. Assessee's Contentions: The assessee argued that the disallowances made by the AO were wrongly confirmed by the ITAT, and the ITAT's decision to delete these disallowances was correct. The assessee relied on previous High Court orders in similar matters concerning the same assessee. Revenue's Contentions: The revenue contended that the ITAT had erred in law in confirming the CIT(A)'s deletion of the disallowances made by the AO.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 37

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITA No.224 of 2008(O&M) Date of decision: 31.7.2009 The Commissioner of Income Tax, Faridabad -----Appellant Vs. M/s Porrits & Spencers (Asia) Limited, Faridabad. -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MRS. JUSTICE DAYA CHAUDHARY Present:- Mr. Rajesh Katoch, Standing Counsel for the revenue. Mr. Santosh Aggarwal and Mr. A.C.Jain, Advocates for the respondent-assessee. Adarsh Kumar Goel,J.

1.

The revenue has filed this appeal under Section 260-A of the Income Tax Act, 1961 (in short, ‘the Act’) against the order dated 23.2.2007 passed by the Income Tax Appellate Tribunal, Delhi Bench ‘A’ New Delhi, in ITA No.3433/DEL/200, for the assessment year 1997-98, proposing to raise following substantial questions of law:- “i) Whether the Hon’ble ITAT has erred in law in confirming the order of the CIT(A) in which the disallowance of Rs.3,14,809/- made by the Assessing Officer on account of Foreign Tour of MD’s wife was deleted? ii) Whether the Hon’ble ITAT has erred in law in confirming the order of the CIT(A) vide which the disallowance of Rs.9,20,591/- made by the Assessing Officer on account of commission paid to Managing Director and the Executives, was deleted? iii) Whether the Hon’ble ITAT has erred in law in confirming the order of the CIT(A) vide which the disallowance of Rs.4,32,155/- made by the Assessing Officer on account of personal use of Car was deleted?”

2.

Learned counsel for the parties agree that question No.(i) is covered in favour of the assessee by order of this Court dated 30.7.2007 in ITA No.220 of 2007 (Commissioner of Income Tax, Faridabad vs.M/s Porrits & Spencers (Asia) Limited, Faridabad). It is, however, clarified that the question is not correctly framed as the Tribunal has allowed 50% of the claim and not the whole of it.

3.

It is also stated that Question No.(ii) is covered by order passed by this Court dated 5.3.2009 in the case of the assessee in ITA No.540 of 2006 (CIT v. M/s Porrits & Spencer (A) Limited,Faridabad), while Question No.(iii) is covered in favour of the assessee by order of this Court dated 5.3.2009 in ITA No.38 of 2008 (CIT v. M/S Porrits and Spencers Limited).

4.

The appeal is disposed of accordingly. (Adarsh Kumar Goel) Judge July 31, 2009 (Daya Chaudhary) ‘gs’ Judge 3

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