COMMISSIONR OF INCOME TAX vs. APPAREL EXPORT PROMOTION COUNCIL\

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ITA - 391 / 2010HC Delhi28 April 20101 pages
For Petitioner: PREM LATA BANSAL
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The Court noted that the issue concerning the application of foreign exhibition expenses under Section 11(1)(a) had been consistently decided in favour of the assessee by the ITAT for several years, starting from assessment year 1979-80. Furthermore, the Court referred to its own previous orders where similar appeals filed by the Revenue for assessment years 2001-02 and 2004-05 were dismissed. Following the principle of consistency and the precedent set by its earlier decisions, the High Court found no reason to interfere with the order of the ITAT. The operative direction was the dismissal of the appeal.

What were the facts?

The appeal concerns assessment year 2003-04, challenging an order dated 31.03.2009 by the Income Tax Appellate Tribunal (ITAT). The dispute revolves around the application of money under Section 11(1)(a) of the Income Tax Act, 1961. The assessee, Apparel Export Promotion Council, incurred foreign exhibition expenses abroad. The Assessing Officer disallowed these expenses as an application of income, denying the assessee the benefit. The Commissioner of Income Tax (Appeals) and the ITAT allowed the assessee's claim, following their consistent stance from assessment year 1979-80 onwards. The High Court noted previous dismissals of similar appeals for assessment years 2001-02 (ITA No. 511/2008) and 2004-05 (ITA No. 48/2010).

What were the issues?

1. Whether the foreign exhibition expenses incurred abroad by the assessee constitute application of income under Section 11(1)(a) of the Income Tax Act, 1961, for the assessment year 2003-04? Assessee's Contention: The assessee contended that the foreign exhibition expenses were a valid application of income under Section 11(1)(a). The ITAT had consistently allowed such claims for several preceding years, and the High Court had previously dismissed appeals filed by the revenue on this very issue for earlier assessment years. Revenue's Contention: The revenue argued that the foreign exhibition expenses were not a valid application of income under Section 11(1)(a). The Assessing Officer had denied the benefit on this ground.

Which sections of the Income-tax Act were involved?

Section 11(1)(a)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI . ITA 391/2010 . COMMISSIONR OF INCOME TAX ..... Appellant Through : Ms P. L. Bansal . versus . APPAREL EXPORT PROMOTION COUNCIL ..... Respondent Through : None . CORAM: HON'BLE MR. JUSTICE BADAR DURREZ AHMED HON'BLE MR. JUSTICE V.K. JAIN . O R D E R 28.04.2010 . . . This appeal is in respect of the assessment year 2003-04 and is against the order dated 31.03.2009 passed by the Income Tax Appellate Tribunal in ITA No.1270/Del/2008.??The issue involved in this appeal is with regard to the question of application?of money under Section 11(1)(a) of the Income Tax Act, 1961. The assessee had incurred foreign exhibition expenses which were spent abroad. The Assessing Officer held that the said expenditure was not by way of application of income under Section 11 (1)(a) and consequently, he denied the benefit to the assessee. The Commissioner of Income Tax (Appeals) as well as the Income Tax Appellate Tribunal relied on its orders of earlier years and allowed the plea of the assessee. It is the matter of fact that the Tribunal has been following the same principle for several years, right from the assessment year 1979-1980. In respect of the assessment year 2001-02 an appeal against the order passed by the Tribunal was filed before this Court being ITA?No.511/2008. The said appeal was also dismissed by this Court.??Similarly, for the assessment year 2004-2005, ITA No. 48/2010 was filed before this Court and was also dismissed by this Court by an order dated 29.01.2010. Consequently, following the principle of consistency, we see no reason to interfere. The appeal is dismissed. . BADAR DURREZ AHMED, J . . . . V.K. JAIN, J APRIL 28, 2010 SR . 4

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