Commissioner Of Income Tax-Ii Chandigarh v. M/S Budhu Slug Technologies (P) Ltd

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.9 of 2010Date of Decision:- March 9, 2010 Commissioner of Income Tax-II Chandigarh VERSUS M/s Budhu Slug Technologies (P) Ltd. ...Appellant ...Respondent CORAM:HON'BLE MR. JUSTICE M.M.KUMARHON'BLE MR. JUSTICE JITENDRA CHAUHAN Present:Ms.Urvashi Dhugga, Advocate for the appellant. 1.To be referred to the Reporter or not?2.Whether the judgment should be reported in the Digest?2.Whether the judgment should be reported in the Digest? ***** M.M.KUMAR, J. Through this appeal filed under Section 260(A) of the IncomeTax Act, 1961 (for brevity the 'Act'), the Revenue has challenged orderdated 23.6.2000 passed by the Income Tax Appellate Tribunal,Chandigarh Bench-B, Chandigarh (for brevity 'Tribunal') in ITANo.409/Chandi/2009, in respect of assessment year 2005-06. It is admitted position that the Tribunal while confirming theview taken by the CIT(A) has come to the conclusion that additions madeby the Assessing Officer were not based on any concrete evidence. TheAssessing Officer had inferred the conclusion by comparing theexpenditure in respect of the assessment year in question with theexpenditure incurred during the previous assessment year 2004-05. TheCIT(A) sought remand report from the Assessing Officer, wherein it wasclaimed that the profit has been inflated by showing meagre expenses. The Tribunal agreed with the view taken by the CIT(A) that non-drawingsalary by the CEO was the prerogative of the assessee-company becausethe business man is entitled to arrange the affairs of his business in sucha way, which is best suitable to its project. The assessee-companybooked expenditure on the basis of accounting principles for the firstyears and as per the requirement of the project for the next year.Expressing agreement with CIT(A), the Tribunal has held that theAssessing Officer was not justified in estimating the expenditure in theabsence of any material on record and that the assessee could not havebeen directed to manage its affairs in a particular manner. The Tribunalhas, however, held that even if all the expenses are claimed, still there isno loss to the Revenue. The aforesaid findings are necessarily based onevidence and would not give rise to any question of law much less asubstantive question of law. We are of the view that the appeal lacks merit and the sameis liable to be dismissed. For the reasons mentioned above, the present appeal isdismissed. (M.M.KUMAR) JUDGE March 9, 2010 Vt (JITENDRA CHAUHAN)JUDGE