THE PR.COMMISSIONER OF INCOME TAX-4 vs. M/S HONDA SEIL POWER PRODUCTS LTD.

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ITA/291/2017HC DelhiDLHC01016633201716 May 2017Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE CHANDER SHEKHAR2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that the issue concerning Advertising, Marketing and Promotion expenses was covered against the Revenue and in favour of the Assessee by this Court's prior decision in the Assessee's own case, Honda Seil Power Products Ltd. v. Dy CIT (2016) 237 Taxman 304, for AY 2008-09. Regarding the provision for service coupons, the Court found that the ITAT had determined, on the facts, that it was made on a scientific basis. Consequently, the Court found no substantial question of law arising from this issue. The appeal was accordingly dismissed.

What were the facts?

The Revenue, represented by the Pr. Commissioner of Income Tax-4, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 26th August, 2016, passed by the Income Tax Appellate Tribunal (ITAT) in ITA No. 1573/Del/2016. The appeal pertains to Assessment Year 2011-12 and challenges two grounds raised by the Revenue. The High Court noted a delay of 38 days in re-filing the appeal, which was condoned. The Assessee is Honda Seil Power Products Ltd. The dispute involves issues related to Advertising, Marketing and Promotion expenses and provision for service coupons.

What were the issues?

1. Whether the ITAT's decision regarding Advertising, Marketing and Promotion expenses is legally sustainable, considering the Revenue's challenge. The Revenue likely argued that these expenses were not allowable. The Assessee would have contended for their allowability. This issue is framed as a question of law. 2. Whether the provision for service coupons, as found by the ITAT to be made on a scientific basis, gives rise to a substantial question of law. The Revenue likely argued that the provision was not made on a scientific basis and therefore not deductible. The Assessee would have argued that the basis was scientific and the provision was valid. This is framed as a question of mixed law and fact, turning on the interpretation of provisions related to business expenditure and provisions under the Income Tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

ITA No.291 of 2017

Page 1 of 2

$~5 * IN THE HIGH COURT OF DELHI AT NEW DELHI

ITA 291/2017

THE PR.COMMISSIONER OF INCOME TAX-4 ..... Appellant

Through: Mr. Ruchir Bhatia, Advocate

versus

HONDA SEIL POWER PRODUCTS LTD. ..... Respondent

Through: Ms. Kavita Jha, Advocate

CORAM: JUSTICE S.MURALIDHAR JUSTICE CHANDER SHEKHAR

O R D E R %

16.05.2017

CM No. 14179/2018 1. For the reasons stated therein, the application is allowed. The delay of 38 days in re-filing the appeal is condoned. The application is disposed of.

ITA No. 291/2017 2. There are two grounds raised by the Revenue in this appeal under Section 260A of the Income Tax Act, 1961 directed against the order dated 26th August, 2016 passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITA No. 1573/Del/2016 for the Assessment Year 2011-12.

As far as the issue concerning the Advertising, Marketing and Promotion expenses is concerned, it stands covered against the Revenue and in favour of the Assessee by the decision of this Court in the Assessee's own case in

ITA No.291 of 2017

Page 2 of 2

Honda Seil Power Products Ltd. v. Dy CIT (2016) 237 Taxman 304 for AY 2008-09.

The second question concerns the provision for service coupons which the ITAT, on the facts, found to have been made on a scientific basis. Consequently, the Court does not see or find any substantial question of law arising therefrom.

The appeal is, accordingly, dismissed.

S.MURALIDHAR, J

CHANDER SHEKHAR, J MAY 16, 2017 tp

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