COMMISSIONER OF INCOME TAX vs. MOHAN MEAKING LTD.

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ITA - 1028 / 2009HC Delhi15 October 20094 pages
For Petitioner: PREM LATA BANSAL
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that the expenses incurred for the welfare of employees were allowable as business expenditure. The principle of consistency was applicable, and no question of law arose from the lower authorities' orders.

What were the facts?

The assessee company incurred expenses on puja, hawan, and kirtan as a welfare measure for its employees. These expenses had been allowed as business expenditure in previous years and were also allowed by the Revenue from assessment year 2002-03 onwards.

What were the issues?

Whether expenses incurred on religious activities for employee welfare are allowable as business expenditure. Whether the principle of consistency applies when the Revenue has allowed similar claims in prior years.

Which sections of the Income-tax Act were involved?

Section 37(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI

+ <u>ITA Nos. 964, 967, 984, 985, 986, 987, 988, 989, 991, 992</u> 1001, 1002, 1003, 1005, 1006, 1007, 1008, 1009, 1010, 1013, 1014 1015 and 1028 of 2009

% <u>Dictated on: 15th October 2009</u>

Commissioner of Income Tax

... Appellant

through:

Ms. Prem Lata Bansal with Ms. Anshul Sharma, Advocates

VERSUS

M/s. Mohan Meakin Ltd.

... Respondent

through:

Mr. C.S. Aggarwal, Sr. Adv. with Mr. Prakash Kumar, Advocate

CORAM:-

THE HON'BLE MR. JUSTICE A.K. SIKRI THE HON'BLE MR. JUSTICE SIDDHARTH MRIDUL

- 1. Whether Reporters of Local newspapers may be allowed to see the Judgment? - 2. To be referred to the Reporter or not? - 3. Whether the Judgment should be reported in the Digest?

A.K. SIKRI, J. (ORAL)

- 1. Common issue which is raised in all these appeals preferred by the Revenue concerns allowing the assessee the expenses incurred in puja, hawan, kirtan etc. under Section 37(1) of the Income Tax Act, 1961. The assessee is the same in all these appeals and issue relates to different assessment orders. Therefore, these appeals were taken up together for hearing. - 2. The brief facts are that the assessee company, as a welfare measure for its employees and staff members, had been incurring since its

2009:DHC:13434-DB

been allowed from 1984-85 till 1989-90 treating the same as business expenditure, namely, welfare measures for the employees. Not only this, he also pointed out that the Revenue itself had allowed the claim of the aforesaid expenses incurred from the assessment year 2002-03 onwards. Thus, principle of consistency would clearly become applicable in the instant case. The learned counsel for the assessee/respondent had produced copies of the orders passed by the Tribunal in respect of earlier years holding that the expenditure was incurred for the welfare of the employees and, therefore, treating the

5.

Another submission of Ms. Bansal was that even if there is no quarrel that the expenditure is to be treated as business expenditure having incurred for the welfare of the employees, it was necessary for the assessee to prove the same, which was not done.

same as business expenditure it was allowed.

6.

However, after going through the orders of the authorities below, we find that there was no dispute in this regard. We, thus, are of the opinion that no question of law arises and dismiss these appeals accordingly.

(A.K. SIKRI)

JUDGE

(SIDDHARTH MRIDUL) JUDGE

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% 15.10.2009

Present: Ms. Prem Lata Bansal with Ms. Anshul Sharma,

Adv. for the appellant.

Mr. C.S.Aggarwal, Sr.Adv. with Mr. Prakash Kumar

for the respondent.

+ ITA Nos. 964/2009, 967/2009, 984/2009, 985/2009, 988/2009, 989/2009, 991/2009, 1003/2009, 1014/2009, 1009/2009, 1013/2009 & 1015/2009

Due to typographical error, these cases have been included in the batch of cases which are dismissed today being ITA No. 964/2009. In fact, they are listed for 21st October, 2009.

It is clarified that the aforesaid cases are not covered by the orders passed in ITA No. 964/2009.

A.K. SIKRI, J

SIDDHARTH MRIDUL, J.

October 15, 2009

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