PARMINDER SINGH,CHANDIGARH vs. PR. CIT-II, CHANDIGARH

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ITA 525/CHANDI/2017Status: DisposedITAT Chandigarh20 November 2018AY 2012-133 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the 'Langar' expenses, though not directly linked, could be considered for business growth and customer attraction, especially given the meager amount. Therefore, the PCIT's revisionary order was not justified.

What were the facts?

The assessee claimed 'Langar' (free food) expenses as business expenditure, stating it was for business promotion and customer attraction. The PCIT disallowed this, finding no direct link between the expenses and the business activity.

What were the issues?

Whether the PCIT was justified in exercising revisionary jurisdiction under Section 263 to disallow 'Langar' expenses claimed as business expenditure.

Which sections of the Income-tax Act were involved?

Section 263

AI-generated summary — verify with the full judgment below

आदेश/Order

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order dated 01.03.2017 of the Principal Commissioner of Income Tax, Chandigarh [hereinafter referred to as ‘PCIT’].

2.

The sole issue raised by the assessee in this appeal is regarding the exercise of revision jurisdiction by the Ld. PCIT u/s 263 of the Income- tax Act, 1961 (in short 'the Act') and thereby disallowing the ‘Langar’ (free food) expenses incurred by the assessee claimed as ‘business expenditure’. The assessee claimed that the aforesaid ‘Langar expenses’ were incurred for the promotion and growth of business. However, the Ld.

ITA No. 525-Chd-2017- Sh. Parminder Singh, Chandigarh 2

PCIT noted that the assessee could not link the aforesaid Langar expenses

with the business activity of the assessee.

3.

Before us, Ld. Counsel for the assessee has submitted that the

assessee is running a petrol pump and ‘langer’ (free food) was offered to

the general public at the business site so as to make aware the public about

the running of petrol pump and also to attract customers as also to show

his goodwill gesture to the customers. The entire exercise was done to get

and attract the customers.

4.

Considering the meager amount of expenditure incurred on the

‘Langer’ by the assessee and the above submissions of the Ld. Counsel for

the assessee, we do not find it a fit case for exercising of revision

jurisdiction by the Ld. PCIT as it cannot be said in strict term that the

motive of the expenditure was not for getting growth of the business.

In view of the above, the impugned order of the Ld. PCIT is set aside

and the appeal of the assessee is hereby allowed. Order pronounced in the Open Court on 20.11.2018.

Sd/- Sd/- (अ�नपूणा� गु�ता / ANNAPURNA GUPTA) (संजय गग� / SANJAY GARG) लेखा सद�य/ Accountant Member �या�यक सद�य/ Judicial Member Dated : 20.11 .2018 “आर.के.” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

ITA No. 525-Chd-2017- Sh. Parminder Singh, Chandigarh 3

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar

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