COMMI. OF IT, FARIDABAD vs. M/S A.R. INDUSTRIES PVT LTD

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ITA/68/2011HC Punjab & HaryanaPHHC01095782201127 April 2011Bench: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE AJAY KUMAR MITTAL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The learned counsel for the appellant (Revenue) fairly stated that the matter was covered against the Revenue by an earlier order of the High Court dated December 1, 2010, in I.T.A. No. 272 of 2006 in CIT v. M/s A.R. Industries Pvt. Ltd. Therefore, the High Court did not delve into the substantial questions of law raised in the present appeal, as the precedent set by its own earlier decision was binding. The operative direction was to dismiss the appeal.

What were the facts?

The Revenue, Commissioner of Income Tax, filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), New Delhi, dated July 2, 2010. The appeal pertained to the assessment year 2001-02. The dispute involved the deduction of Rs. 19,65,000 claimed by the assessee, M/s A.R. Industries (P) Ltd., on account of development charges for product development, which the assessee treated as revenue expenditure. The ITAT had upheld the order of the Commissioner of Income Tax (Appeals) allowing this deduction. The Revenue's appeal to the High Court was based on substantial questions of law.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in upholding the CIT(A)'s order allowing the deduction of Rs. 19,65,000 claimed by the assessee on account of development charges as revenue expenditure, by relying on a previous Tribunal order for assessment year 2000-01 in the assessee's own case, against which the Revenue's appeal was pending before the High Court, and without providing independent reasoning. 2. Whether, on the facts and in the circumstances of the case, the ITAT committed an illegality by failing to consider all material facts and evidence on record and by not recording its own findings on the issue of allowing the deduction of Rs. 19,65,000, merely following precedents without discussion, despite being the final authority on facts. Assessee's contentions: Not recorded. Revenue's contentions: The ITAT erred by allowing the deduction based on a previous order without independent consideration and by failing to record its own findings on the material facts and evidence.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.68 of 2011 Date of decision: 27.4.2011 Commissioner of Income Tax. -----Appellant. Vs. M/s A.R. Industries (P) Ltd. -----Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Yogesh Putney , Sr. Standing Counsel for the appellant. --- ADARSH KUMAR GOEL, J.

This appeal has been preferred by the revenue under Section 260-A of the Income Tax Act, 1961 (for short, “the Act”) against the order of the Income Tax Appellate Tribunal, New Delhi dated 2.7.2010 in ITA No.1893(Del)/2010 for the assessment year 2001-02 claiming following substantial questions of law:- “I. Whether, on the facts and in the circumstances of the case, the Ld. ITAT was right in law in upholding the order of the CIT(A) in allowing deduction of Rs.19,65,000/- claimed by the assessee on account of development charges for the product development as revenue expenditure by relying on Tribunal’s order for the

I.T.A. No.68 of 2011 Asstt. Year 2000-01 dated 03-05-2005 in assessee’s case against which revenue’s appeal is pending before the Hon’ble High Court and without giving any reasons for his own? (ii) Whether, on the facts ad in the circumstances of the case, the Ld. ITAT has committee illegality by failing to consider all material facts and evidence brought on record and further failed to record the finding on the issue of allowing deduction of Rs.19,65,000/- claimed by the assessee on account of development charges even though it was obligatory on the part of the ITAT to decide the matter being the final authority of facts and not merely by follow the precedents without any discussion?” Learned counsel for the appellant fairly states that the matter is covered against the revenue by earlier order of this Court dated 1.12.2010 in I.T.A. No.272 of 2006 in CIT v. M/s A.R. Industries Pvt. Ltd. Accordingly, this appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE April 27, 2011 ( AJAY KUMAR MITTAL ) ashwani JUDGE 2

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