CIT vs. JCB INDIA LTD

IN THE HIGH COURT OF DELHI AT NEW DELHI . . . ITA 83/2012 . . . CIT ..... Appellant . Through Mr. Sanjeev Sabharwal, Adv. . . . versus . . . JCB INDIA LTD ..... Respondent . Through . . . CORAM: . HON'BLE MR. JUSTICE SANJIV KHANNA . HON'BLE MR. JUSTICE R.V.EASWAR . . . O R D E R . 13.02.2012 . . . By the impugned order dated 30th March, 2011, the Income Tax Appellate Tribunal (for short, the tribunal) has dismissed the appeal of the Revenue holding that the requirement of failure/omission of the assessee to make full and true disclosure of material facts was not satisfied in the present case. . 2. The assessment year in question is 2001-02 and the reasons for reopening were recorded on 31st March, 2008 i.e. four years after the end of the relevant assessment year. It is admitted that earlier there was a regular assessment under Section 143(3) of the Income Tax Act, 1961, vide order dated 30th September, 2004, at an income of Rs.53,54,39,446/-. . 3. In the reasons recorded, it was stated as under:- . ?The regular assessment in this case was completed under section 143(3) on 30.09.2009 at total income of Rs.53,54,39,446/-. . The examination of the assessment records reveals that the assessee has claimed a sum of Rs.26,50,830/- on account of expenditure on club, which is in the nature of non business expenditure. Hence, the same is disallowable. . I have therefore reason to believe that the income of Rs. 26,50,830/- chargeable to tax has escaped assessment within the meaning of section 148 of the Act. The income of the assessee requires re- computation.? . . . 4. The tribunal has recorded a finding of fact that in the original assessment proceedings, the assessee had shown and disclosed that an amount of Rs.26,50,830/- was incurred as club expenditure. It was claimed as a business expenses in the return. The expenditure was separately indicated in the Tax Audit Report in table 1. The Assessing Officer had allowed the same. . 5. Before the tribunal, the Revenue had submitted that there was failure/omission on the part of the respondent-assessee to make full and true disclosure of material facts. However, the said contention could not be substantiated. The Revenue is not able to point out how and in what manner there was failure to disclose the said expenditure or the nature and character was not stated or disclosed. The true and full disclosure of the expenditure was made in the return. The stand and content of the respondent assessee was that the expenditure was for business purpose and allowable under Section 37 of the Act. . 6. Learned counsel for the Revenue submitted that in course of the reassessment proceedings, the assessee had agreed that 50% of the club expenses should be disallowed. The said contention of the Revenue has to be rejected as it was an alternative contention and secondly, the judicial pre condition for reopening are not satisfied in the present case. . 7. In view of the aforesaid factual position, it is held that the order passed by the tribunal is correct and does not require any interference. The appeal is dismissed. . . . . . SANJIV KHANNA, J. . . . . . . . R.V.EASWAR, J. . FEBRUARY 13, 2012 . NA . . . . . $ 5 .