D.b. Income Tax Appeal v. M/S Jaipur Telecom Pvt. Ltd

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 89 / 2010COMMISSIONER OF INCOME TAX, JAIPUR-II, JAIPUR. ----Appellant Versus M/S Jaipur Telecom Pvt. Ltd., 52, Shopping Center, Shastri Nagar, Jaipur. ----Respondent _____________________________________________________ For Appellant(s) : Mr. K.D. Mathur & Mr. Prateek Kedawat on behalf of Mr. R.B. Mathur For Respondent(s) : Mr. Priyesh Kasliwal _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE DR. JUSTICE VIRENDRA KUMAR MATHURJudgment Per Hon’ble Jhaveri, J.29/05/2017 1.By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal whereby the Tribunal hasdismissed the appeal of the department confirming the order ofthe CIT(A) and allowed the expenses under Section 37 of theIncome Tax Act. 2.This Court while admitting the appeal on 01.02.2011 hasframed the following substantial question of law: “Whether in the facts and circumstances ofthe case the ITAT was justified in law inconfirming the order of CIT(A) deleting thedisallowances of the expenses u/s 37 of theIT Act of commission payments despite ofthe facts that the assessee failed todischarge its onus of proving thejustification of the expenditure claimedbefore the Assessing Officer?” 3.While considering the case of the assessee, the CIT(A) hasconsidered the case of the assessee in detail and has given itsfinding item wise and after taking into consideration para 4.3 hasobserved as under: “4.3 I have considered facts of the case andarguments taken by Sh. Agarwal quitecarefully. It is seen that the appellantcompany is engaged in the filed to telelcomline and certainly it is a different filed of realestate development, which is not thebusiness activity in direct or indirect formconnected with the existing business activityof the activity of the appellant company.Irrespective of the fact that any payment ismade to become founder member or if suchpayment is made on annual basis it has to beseen that whether it is for the purpose of theappellant which is the basic requirement u/s37(1) of the IT Act. Since the saidsubscription payment is not for the businesspurpose of the appellant company, therefore,the assessing Officer was fully justified indisallowing the said claim and the additionmade by the A.O. is hereby confirmed byrejecting grounds of appeal No.4.” 4.The same view was confirmed by the Tribunal. In view of theconcurrent finding, the view taken by the Tribunal is just andproper. 5.In that view of the matter, the issue is required to beanswered in favour of the assessee and against the department. 6.The appeal stands dismissed. (VIRENDRA KUMAR MATHUR),J. (K.S. JHAVERI),J.