CIT vs. LUTHRA & LUTHRA LAW OFFICE

IN THE HIGH COURT OF DELHI AT NEW DELHI . 08.11.2010 . Present: Ms. Rashmi Chopra, Advocate for the Appellant. . . + ITA No. 1695/2010. . While carrying out the assessment for the Assessment Year 2005-2006, which is the subject matter of this appeal, the Assessing Officer noticed that the assessee had shown expenses to the tune of ` 2584236/- on account of stationery items. According to the Assessing Officer expenses incurred were abnormally high when compared to the expenses on the same items in the preceding year and on this account he restricted the expenses to ` 5 lacs and the balance amount was disallowed. The CIT(A) reversed this order of the Assessing Officer allowing the entire expenditure incurred on account of stationery. The CIT(A) found that the assessee was not given any opportunity to explain the reasons why the expenses in this year were much higher than the expenses incurred in the last year. Before CIT(A) it was explained by the assessee that bulk purchase was made in the stationery items in the said year. It was also explained that a lot of stamp papers were purchased by the assessee firm for clients to execute various agreements and these expenses have been debited under the head ?Printing and Stationery?. Another reason which was furnished was that major computerized exercise was undertaken to improve the working of the firm and the firm has also got in house heavy duty printers and a . -2- commercial quality photocopier to take care of increased heavy load of printing jobs. Finding this explanation as justified, reason for higher expenditure in the year in question, the CIT(A) had allowed the same which decision is upheld by the Income Tax Appellate Tribunal as well. It is a pure finding of fact the two authorities below had accepted the explanation and have recorded the finding that expenditure was in fact incurred. We are, therefore, of the opinion that no substantial question of law arises. Dismissed. . A.K. SIKRI, J. . SURESH KAIT, J. NOVEMBER 08, 2010 hk . #5