The Commissionr of Income tax, vs. M/s. southern Rocks AND Minerals (P) Limited

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Income Tax Appeal No. 128 / 2010 Assistant Commissioner of Income Tax, Central-1, Jodhpur. ----Appellant Versus Shri Karan Singh Khichi, Director, M/s. Ashapurna Buildcon, Near Circuit House, Jodhpur. ----Respondent _____________________________________________________ For Appellant(s) : Mr. KK Bissa For Respondent(s) : Mr. Lalit Pareek _____________________________________________________ HON'BLE MR. JUSTICE GOVIND MATHUR HON'BLE MR. JUSTICE VINIT KUMAR MATHUR Judgment 10/05/2017

This appeal is before us to question correctness of order ated 30.9.2007 passed by learned Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur in ITA No.120/JDPR/2007 for the assessment year 2001-02. The questions before us for consideration are as follows :- “(1) Whether the Tribunal was justified in dismissing the Revenue’s appeal and allowing assessee’s cross objection ? (2) Whether the Tribunal was justified in allowing the deduction claimed by the assessee amounting to Rs.30,00,000/- and if so, whether grounds allowing deduction is legally sustainable.?”

(2 of 2) [ITA-128/2010] It is submitted by learned counsel appearing on behalf of Revenue that the Tribunal grossly erred while accepting the appeal preferred by the assessee without examining the fact that the expenditure to execute contractual liability could have been allowed on accrual basis basis even if the same has not been actually incurred only if that was a part of contract and would have been subsequently utilized for the purpose given. From perusal of order passed by the Income Tax Appellate Tribunal, it is apparent that the finding arrived is founded on adequate examination of facts and law. The deduction claimed by the assessee is nothing but the amount that incurred in development of parks, drainage, roads, temple and boundary wall etc. These were the contractual liabilities of the assessee. The assessee was under an obligation to satisfy all these contractual liabilities and, therefore, the plea taken by the Revenue is not sustainable. The appeal, as such, deserves to be dismissed with the finding that the Tribunal rightly allowed the deductions claimed by the assessee for an amount of Rs.30 Lacs. (VINIT KUMAR MATHUR)J. (GOVIND MATHUR)J. Sanjay