COMMISSIONER OF INCOME TAX, RT vs. PORRITTS & SPENCER (ASIA) LTD.

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ITR/196/1999HC Punjab & HaryanaPHHC01038646199920 November 2008Bench: MR. JUSTICE L.N. MITTAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
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What did the High Court hold?

The High Court noted that learned counsel for both parties do not dispute that the question referred is covered in favour of the assessee by an earlier order of this Court dated September 16, 2008, in I.T.R. Nos. 80 to 82 (Porritts & Spencer (Asia) Ltd. v. The Commissioner of Income Tax, Haryana). Therefore, following its own precedent, the Court answered the question against the revenue and in favour of the assessee. The addition of Rs. 2,41,533/- on account of commission/bonus paid to employees, which was deleted by the CIT(A) and upheld by the Tribunal, is thus confirmed to be unjustifiable. The reference is disposed of in terms of this finding.

What were the facts?

The Commissioner of Income Tax, Haryana, Rohtak (the revenue) is the appellant, and M/s Porritts & Spencer (Asia) Ltd. (the assessee) is the respondent. The case pertains to the assessment year 1989-90. The High Court of Punjab and Haryana at Chandigarh is considering a reference from the Income Tax Appellate Tribunal, Delhi Bench 'D', arising out of its order dated April 15, 1998. The dispute concerns an addition of Rs. 2,41,533/- made under Section 36(1)(ii) of the Income Tax Act, 1961, on account of commission/bonus paid to employees. The Commissioner (Appeals) had deleted this addition, and the Tribunal upheld that deletion. The revenue has sought a reference on this point.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal was right in law in upholding the decision of the CIT(A) deleting the addition of Rs.2,41,533/- under section 36(1)(ii) on account of payment of commission/bonus to employees? The revenue's contention, implied by the reference, is that the addition made under Section 36(1)(ii) was justified and should not have been deleted by the lower authorities. The assessee's contention, as supported by the Tribunal's order and the High Court's subsequent decision, is that the deletion of the addition was correct. The parties do not dispute that the issue is covered by a prior judgment of this Court.

Which sections of the Income-tax Act were involved?

Section 36(1)(ii)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.R. No.196 of 1999 Date of decision: 20.11.2008 The Commissioner of Income Tax, Haryana, Rohtak. -----Appellant. Vs. M/s Porritts & Spencer (Asia) Ltd. -----Respondent. CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE L.N. MITTAL Present: Mr. Yogesh Putney, Sr. Standing Counsel for the revenue. Mr. Santosh Aggarwal, Advocate & Mr. A.C. Jain, Advocate for the assessee. ----- ORDER:

Following question has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Delhi Bench ‘D’, New Delhi, arising out of its order dated 15.4.1998 in I.T.A. No.6854/Del/92, for the assessment year 1989-90:- “Whether on the facts and in the circumstances of the case, the Hon’ble Tribunal was right in law in upholding the decision of the CIT(A) deleting the addition of Rs.2,41,533/- under section 36(1)(ii) on account of payment of commission/bonus to employees?

ITR No.196 of 1999

Learned counsel for the parties do not dispute that the above question is covered in favour of the assessee by earlier order of this Court dated 16.9.2008 in I.T.R. Nos.80 to 82 (Porritts & Spencer (Asia) Ltd. v. The Commissioner of Income Tax, Haryana).

Accordingly, the question is answered against the revenue and in favour of the assessee.

The reference is disposed of. ( ADARSH KUMAR GOEL ) JUDGE November 20, 2008

(L. N. MITTAL) ashwani JUDGE 2

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