COMMISSIONER OF INCOME TAX vs. G4S SECURITY SERVICES INDIA PVT LTD

ITA - 70 / 2009HC Delhi18 February 20091 pages

For Petitioner: R.DJOLLY

AI SummaryDismissed

What did the High Court hold?

The High Court found no fault with the reasoning of the Income Tax Appellate Tribunal (ITAT). The Tribunal had applied the decision of the Supreme Court in Commissioner of Income Tax vs. Madras Auto Services (P.) Ltd. The High Court held that in view of the Madras Auto Services decision, no substantial question of law arose for its consideration. Consequently, the appeal filed by the Commissioner of Income Tax was dismissed. The operative direction was to dismiss the appeal, meaning the ITAT's order was upheld.

What were the facts?

The assessee, G4S Security Services India Pvt Ltd, entered into a lease agreement on April 8, 1999, for an initial term of three years, extendable to nine years. The lessor lacked the means to provide additional constructed area, so it was agreed that the assessee would undertake the construction. This additional construction was to be treated as carried out on behalf of the lessor, who would be the owner. The assessee incurred a total expenditure of Rs 10,50,11,770/- between May 1999 and August 2001 for this construction. The Income Tax Appellate Tribunal (ITAT) applied the Supreme Court's decision in Commissioner of Income Tax vs. Madras Auto Services (P.) Ltd., among other decisions. The present appeal is by the Commissioner of Income Tax against the order of the ITAT.

What were the issues?

1. Whether the expenditure incurred by the assessee on the construction of additional area, which was to be treated as carried out on behalf of the lessor and owned by the lessor, is a capital expenditure deductible by the assessee? (Question of law) Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, it is implied that the assessee's position aligns with the ITAT's decision. The ITAT relied on the Supreme Court decision in Commissioner of Income Tax vs. Madras Auto Services (P.) Ltd. Revenue's Contention: The revenue, represented by the Commissioner of Income Tax, is appealing the ITAT's order. The judgment does not explicitly detail the revenue's arguments before the High Court, but it is understood that they challenged the ITAT's allowance of the expenditure as a deduction or its treatment.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI . . ITA 70/2009 . . COMMISSIONER OF INCOME TAX ..... Appellant Through Mr.R.D.Jolly, Adv. . versus . G4S SECURITY SERVICES INDIA PVT LTD ... Respondent Through . . CORAM: HON'BLE MR. JUSTICE VIKRAMAJIT SEN HON'BLE MR. JUSTICE RAJIV SHAKDHER . O R D E R 18.02.2009 . As has been noted by the ITAT the Assessee Company had entered into a lease agreement dated 8.4.1999. The term was initially for a period of three years extendable for a total of nine years. Since the Lessor did not have the requisite means for providing additional constructed area it was agreed that the Assessee shall construct the same. Further, it was agreed that the additional construction so undertaken by the Lessee Assessee was to be treated as having been carried out on behalf of the Lessor who would be the owner thereof. It was in this regard that a total expenditure of Rs 10,50,11,770/- during ITA 70/2009 Page 1 of 2 the period May 1999 to August 2001 was incurred. In these facts the ITAT has applied decision of the Supreme Court in Commissioner of Income Tax ?vs- Madras Auto Services (P.) Ltd., [1998] 233 ITR 468 among other decisions. We find no fault with the reasoning of the Tribunal. In view of Madras Auto no substantial question of law arises for our consideration. Dismissed. . . . . VIKRAMAJIT SEN,J . . . . RAJIV SHAKDHER, J FEBRUARY 18, 2009 Nt . . . . . . . . . . . . . . . . . . . ITA 70/2009 Page 2 of 2 . . . . . . 22

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