D.b. Income Tax Appeal v. M/S Rajasthan State Ltd.]Dated : 09.03.2007

D.B. INCOME TAX APPEAL NO.11/2007. [CIT UDAIPUR VS. M/S RAJASTHAN STATE LTD.]DATED : 09.03.2007 HON'BLE MR. RAJESH BALIA, J.HON'BLE MR. CHATRA RAM JAT, J. Mr.K.K.Bissa for the appellant ***** Heard learned counsel for the appellant. This appeal is directed against the order of Tribunal. The following three questions have been referred as questionsof law arising for consideration in this appeal. [1] Whether on the facts and in thecircumstances of the case as well as in thelaw the learned Tribunal was justified indeleting the addition made by the AOapplying the provision of Section 43B of theAct regarding non payment of dead rent andthe royalty before the due date of filing ofreturn ignoring the finding of the AO that theassessee failed to submit the proof of theactual payment? [2] Whether on the facts and in thecircumstances of the case as well as in thelaw, the learned Tribunal is justified indeleting the additions of Rs.79,432/- madeon account of return preliminary expensesunder Section 35 D [2] of the Act? [3] Whether on the facts and in thecircumstances of the case as well as in thelaw the learned Tribunal was justified indeleting the addition of Rs.5,45,000/- madeon account of the valuation of closing stockignoring the finding of AO? We are of the opinion that the question No.1 and 3depend on pure findings of fact and do not give rise to questionof law. The first question relates to the fact whether actualpayment was made by the assessee to RSDMC under theagreement. While Assessing Officer without directing anyinquiry to the recipient RSDMC has disallowed the claim onaccount of payment of royalty and dead rent on the ground thatproof of actual payment has not been placed before it.However, the CIT [Appeals] as well as Tribunal found as a factthat actual payment has been made by the assessee. Thefinding whether actual payment has been made to the RSDMCis a finding of fact and does not give rise to any question of lawnor the finding of fact is vitiated. Similarly, question No.3 relates to the valuation ofclosing stock which has been decided on principle that closingstock disclosed by the assessee in the books of the accountson the basis of regular method employed by the assesseedoes not call for any additions and the additions made by theAssessing Officer by revaluating the stock was deleted. Thisalso is a pure question of fact. No question of law arise onthat count. So far as question No. 2 is concerned, the Tribunal onthe basis of explanation to Section 35 D has found that assessee was entitled to claim 1/10[th] of the cost of installationas deduction on revenue account out of the pre-establishmentexpenses. The provision of law being clear it also does not giverise to any substantial question of law. Accordingly, the appeal fails and is hereby dismissed. J. , J.