Commissioner Of Income Tax, Faridabad v. M/S Porrits & Spencers (Asia) Limited, Faridabad

IN THE HIGH COURT OF PUNJAB AND HARYANAAT CHANDIGARH. ITA No.45 of 2009(O&M)Date of decision: 30.7.2009 Commissioner of Income Tax, Faridabad -----Appellant Vs. M/s Porrits & Spencers (Asia) Limited, Faridabad. -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOELHON'BLE MRS. JUSTICE DAYA CHAUDHARY Present:- Mr. Rajesh Katoch, Standing Counsel for therevenue.revenue. Mr. Santosh Aggarwal and Mr. A.C.Jain, Advocatesfor the respondent-assessee. Adarsh Kumar Goel,J. 1.Notice was issued on condonation of delay.Notice was issued on condonation of delay. 2.Delay condoned. Heard on merits. 4.This appeal has been preferred by the revenueunder section 260-A of the Income Tax Act, 1961 (in short,‘the Act’) against the order dated 6.7.2007 passed by theIncome Tax Appellate Tribunal, Delhi Bench ‘B’ NewDelhi in ITA No.5230/(DEL)/2004 for the assessment year 2001-02, proposing to raise following substantial questionsof law:- “Whether the Hon’ble ITAT has erred in lawin confirming the order of the CIT(A) videwhich the disallowance of Rs.4,35,000/- madeby the Assessing Officer on account ofcommission paid to Managing Director andthe Executives, was deleted? ii) Whether the Hon’ble ITAT has erred in lawin confirming the order of the CIT(A) inwhich the disallowance of Rs.11,17,288/-made by the Assessing Officer being nonverifiable and personal in nature out of staffwelfare expenses, was deleted?” 5. The Assessing Officer disallowed deduction claimed on account of commission paid to ManagingDirector and Executives and expenditure out of staffwelfare which was not verifiable and was personal innature. On appeal, the claim of the assessee was upheld bythe CIT(A) as well as the Tribunal. 6.The Tribunal followed its earlier order in the caseof the assessee. 7.We have heard learned counsel for the parties. 8.Learned counsel for the assessee points out thatITA No.540 of 2006 raising an identical issue in the case ofthe assessee has been dismissed on 5.3.2009. He furtherpoints out that with regard to Question No.(ii), ITA No.362of 2005 was filed by the revenue in the earlier assessmentyear but no such question was raised. Even otherwise, thesaid question cannot be held to be substantial question oflaw in view of judgment of the Hon’ble Supreme Court inShahzada Nand & Sons v. CIT, (1977) 108 ITR 358,laying down that the concept of business expediency had tobe considered in the context of current socio economicthinking that the business is product of combined efforts ofthe employer and employees and liberal approach has to beadopted to allow expenses for welfare of employees.9.In view of above, we are unable to hold that the questions proposed are substantial questions of law. 10.The appeal is dismissed. (Adarsh Kumar Goel) Judge July 30, 2009‘gs’ (Daya Chaudhary)Judge