COMMISSIONER OF IT vs. M/S AMG HOTELS (P) LTD

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ITA/651/2005HC Punjab & HaryanaPHHC01072777200512 March 2008Author: MR JUSTICE RAKESH KUMAR GARG,MR. JUSTICE SATISH KUMAR MITTAL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arose for its determination. It observed that a similar appeal (ITA No.496 of 2005) with similar facts and a similar question of law had been dismissed by the same court by a judgment of even date. Following the reasoning in that previous judgment, the High Court found no grounds to interfere with the order of the Tribunal. Therefore, the appeal was dismissed. The specific reasoning of the ITAT or the CIT(A) regarding the food cost ratio is not detailed in this High Court judgment, other than the Revenue's contention that it was based on conjectures and surmises. The operative direction was to dismiss 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'. The appeal pertains to Assessment Year 1998-99 and challenges the ITAT's order dated July 13, 2005, passed in ITA No.500/CHANDI/2002. The dispute involves the disallowance of certain expenses related to food costs. The Assessing Officer (AO) had based his order on the results of 16 hotels/restaurants, while the Commissioner of Income Tax (Appeals) [CIT(A)] had restricted the food cost ratio to 55% based on conjectures and surmises without evidence. The High Court noted that a similar appeal (ITA No.496 of 2005) with similar facts and questions of law had been dismissed by the same court.

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 the fact that the CIT(A) restricted the food cost ratio to 55% 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/mixed law and fact, turning on the appreciation of evidence and perversity of findings). 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 55% without evidence, relying on conjectures and surmises, whereas the AO's assessment was based on the results of 16 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 AMG 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 Mr.Akshay Bhan, Advocate for the respondents. Rakesh Kumar Garg,J

1.

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 13.7.2005 passed in ITA No.500/CHANDI/2002 for the Assessment Year 1998-99 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 55 % 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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