COMMISSIONER OF INCOME TAX vs. EICHER LTD

ITA - 530 / 2010HC Delhi25 May 20101 pages

For Petitioner: P.L. BANSAL

AI SummaryPartly Allowed

What did the High Court hold?

The High Court modified the order of the ITAT. While the Tribunal had directed a remand to the Assessing Officer to decide all issues, including the disallowance of Rs. 31,24,779/- for software purchase expenses based on the Amway India Enterprises decision, the High Court's modification focused on the scope of the remand. The Court held that the restricted remand on the second issue should not be followed in a constricted manner by the Assessing Officer. It was clarified that it would be open for the Revenue to rely on any other decision of the Tribunal or any Court and to advance all contentions to show that the decision rendered in Amway India Enterprises (supra) is not applicable to the case. The appeal was disposed of with this modification.

What were the facts?

The appeal before the High Court of Delhi concerns an order passed by the Income Tax Appellate Tribunal (ITAT) in ITA No. 4192/Del./2005 for Assessment Year 2001-2002. The ITAT had directed a remand to the Assessing Officer (AO) to decide all issues. Specifically, regarding the disallowance of Rs. 31,24,779/- as expenses for software purchase, the ITAT instructed the AO to decide based on the decision in Amway India Enterprises 111 ITD 112 (SB), which was based on a functional test. The High Court heard arguments from the counsel for the Revenue and the Assessee.

What were the issues?

1. Whether the Income Tax Appellate Tribunal erred in directing a remand to the Assessing Officer to decide all issues, particularly the disallowance of Rs. 31,24,779/- for software purchase expenses, based on the functional test as laid down in Amway India Enterprises 111 ITD 112 (SB)? (Question of law) Assessee's Contentions: The judgment does not record specific contentions from the Assessee regarding the issues decided by the Tribunal or the modification by the High Court. Revenue's Contentions: The Revenue, represented by Ms. Prem Lata Bansal, argued that the restricted remand on the second issue, as stated in paragraph 6 of the Tribunal's order, should not be followed in a constricted manner. The Revenue contended that it should be open to rely on any other decision of the Tribunal or any Court and to advance all arguments to demonstrate that the decision in Amway India Enterprises (supra) is not applicable to the case.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI . 25.05.2010 #4 Present: Ms. Prem Lata Bansal, Adv. for the Appellant. None for the Respondent. . + ITA No.530/2010 . This is an appeal under Section 260A of the Income Tax Act, 1961 (for brevity ?the Act?) challenging the correctness of the order passed by the Income Tax Appellate Tribunal (for short ?the tribunal?) in ITA No. 4192/Del./2005 pertaining to Assessment Year 2001-2002 whereby the tribunal has directed a remit to the Assessing Officer to decide all the issues. Be it noted, the tribunal while dealing with the ground relating to disallowance of Rs.31,24,779/- which was the expenses incurred for the purchase of software had directed that the Assessing Officer shall decide the said issue on the basis of the decision rendered in Amway India Enterprises 111 ITD 112 (SB), which was decided by the tribunal on the basis of the functional test. We have heard Ms. Bansal, learned counsel for the Revenue and Ms. Kavita Jha, learned counsel for the Assessee. Having heard learned counsel for the parties, we are only inclined to modify the order of the tribunal to the extent that the restricted remand on the second issue which has been stated in paragraph 6 of the order of the tribunal would not be followed in a ITA No.530/2010 Page 1 of 2 constricted manner by the Assessing Officer and it would be open for the Revenue to rely on any other decision of the tribunal or any Court and further advance all contentions to show that the decision rendered in Amway India Enterprises (supra) is not applicable to the case at hand. With the aforesaid modification in the order of the tribunal, the appeal stands disposed of. . CHIEF JUSTICE . . . MAY 25, 2010 MADAN B. LOKUR, J dk . . . . . . . . . ITA No.530/2010 Page 2 of 2 . . . . . . . . . . . . . . .

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