D.b. Income Tax Appeal v. Assistant Commissioner Of Income Tax, Circle-1, Kota

In The High Court of Judicature For RajasthanJaipur Bench, JaipurO R D E R D.B. Income Tax Appeal No.100/2012M/s. Rajasthan Telematics Ltd. Vs. Assistant Commissioner of Income Tax, Circle-1, Kota Date :: 04.01.2013 Hon'ble Mr. Justice Ajay RastogiHon'ble Ms. Justice Bela M. Trivedi Mr. N.K. Baid with Mr. Muzaffar Iqbal, for appellant. Instant income tax appeal has been filed bythe assessee U/s 260A of the Income TaxAct,1961 (“Act,1961”) assailing order of theIncome Tax Appellate Tribunal dt.04.11.2011dismissing appeal preferred by the appellant-assessee regarding reassessment being made bythe assessing authority on reopening of theproceedings pursuant to notice dt.06.12.2005U/s 148 of the Act,1961 for the assessment year2002-03. From the material which came on record, thereturn of the assessee was processed for theassessment year 2002-03 U/s 143(1) of the Acton 17.02.2003 accepting the same but when itrevealed at a later stage that there was escapeof income for the assessment year 2002-03 ascontemplated U/s 147 of the Act,1961, theassessing authority after recording its duesatisfaction & assigning reasons served noticeU/s 148 of the Act,1961 dt.06.12.2005 upon theassessee and after the notice being servedobviously asking to submit written objections regarding dis-allowance of expenses referred to in the notice dt.06.12.2005, opportunity wasafforded to the assessee and the assessingauthority made reassessment for the assessmentyear 2002-03 U/s 143(3) of the Act,1961 videorder dt.18.12.2006. It will be relevant torecord that the primary objection noticed bythe assessing authority while serving noticeupon the assessee as provided U/s 148 of theAct,1961 was in regard to dis-allowance ofsalary of Rs.1,50,000/- to the ManagingDirector of the assessee company on 30[th]March,2002 in cash and Rs.5 Lacs towardsadvance salary for the assessment year 2002-03in cash on 10.04.2002 and since it was paymentof salary in cash exceeding Rs.20,000/-, theabove expenses were dis-allowable as providedU/s 40A(3) of the Act,1961 and apart fromcertain other government expenses incurred asalleged for staff training expenses was alsodisallowed and the reason which was forthcomingfrom the assessee that expenses have beenincurred by the company on improvement of theirskill which could be used at later point oftime for betterment of the company but thedetails & vouchers of foreign travel expensesincurred it emerged that person as alleged tobe employed was son of the Managing Directorwho was sent to foreign university for higherstudies and it was considered to be non- business expenditure, hence was disallowed & added to the income of the assessee. Againstthe order of reassessment passed by theassessing authority dt.18.12.2006 the mattertravelled upto Income Tax Appellate Tribunal.However, order came to be passed jointly forthe assessment years 2002-03 & 2004-05 butcounsel for appellant submits that he is onlyaggrieved in regard to reopening of theassessment made for the year 2002-03 and has nogrievance as regards assessment year 2004-05 ofthe order of the Tribunal dt.04.11.2011. business expenditure, hence was disallowed & added to the income of the assessee. Againstthe order of reassessment passed by theassessing authority dt.18.12.2006 the mattertravelled upto Income Tax Appellate Tribunal.However, order came to be passed jointly forthe assessment years 2002-03 & 2004-05 butcounsel for appellant submits that he is onlyaggrieved in regard to reopening of theassessment made for the year 2002-03 and has nogrievance as regards assessment year 2004-05 ofthe order of the Tribunal dt.04.11.2011. The learned Tribunal while re-appreciatingthe factual matrix in detail was of the viewthat the income declared by the companyregarding business expenditure were dis-allowable U/s 40A(3) of the Act,1961 and thereasonings which was forthcoming from theassessee as regards expenses incurred forexpenditure regarding training of staff was notacceptable and such income was considered to benon-business expenses, hence were disallowed &added to the income of the assessee and afterexamining the factual material came on recordthe learned Tribunal was of the view that suchof the expenses are non-business expenses hencedisallowed & affirmed order of the assessingauthority regarding adding income of theassessee & dismissed the appeal preferred bythe assessee as regards assessment year 2002-03 We have heard counsel for appellant atlength and also gone through the substantialquestion of law which he re-framed under thedirections of the Court but we are of theconsidered view that merely question of law isnot sufficient and the requirement of statuteis that there should be a substantial questionof law which requires consideration U/s 260A ofthe Act and rightly so the legislature iscertainly of the view that as regards thefactual matrix the matter being examined atvarious levels upto the Income Tax AppellateTribunal such factual matrix must be put torest at some stage and that being so onlysubstantial question of law if emergescertainly is to be considered by this Court.On submission made by counsel for appellantwe do not find any substantial question of lawat all emerges to be considered by this Courtin the instant income tax appeal. Consequently, the appeal is withoutsubstance and accordingly dismissed. (Bela M. Trivedi), J. (Ajay Rastogi),J. VS Shekhawat/-p.4100ITA12Jan4FnlDsps.docCertificate - All corrections have been incorporated in the judgment/order being emailed/Vijay Singh Shekhawat/PAJW100ITA12Jan4FnlDsps.docCertificate - All corrections have been incorporated in the judgment/order being emailed/Vijay Singh Shekhawat/PAJW