Director Of Income Tax (International Taxation v. Toyo Engineering Corporation

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.665 OF 2011 Director of Income Tax (International Taxation)..Appellant. Versus Toyo Engineering Corporation..Respondent. Mr.Suresh Kumar for the appellant.Mr.Madhur Agarwal i/by Mint & Confreres for the respondent. P.C. : 1.In this appeal by the Revenue, following questions of law have been formulated for our consideration. “a)Whether on the facts and in the circumstances of the case, the Tribunal was correct in law in deleting the disallowances of Rs.1,80,77,991/- under Section 37(4) and 37(5) of the Income Tax Act, 1961? b)Whether, on the facts and circumstances of the case, the Tribunal was correct in law in deleting Rs.63,86,848/- disallowed by the Assessing Officer for want of requisite invoices relying on TDS certificates and form No.27 produced by the assessee without giving opportunity to the Assessing Officer to examine the correctness of the same ?” 2.So far as question (a) is concerned, the assessing officer disallowed the claim of Rs.1.80 crores on the ground that these expenses were spent on guest-houses. The Commissioner of Income Tax (A) as well as the Tribunal have reached a finding of fact that the accommodation made available to expatriate employees was in accordance with the employment agreement. The employment agreement require the respondent – assessee to provide residential premises to the expatriate employees. This providing of accommodation was also taxed as a perquisite. Consequently, both the authorities have held that the assessing officer was incorrect in disallowing the expenditure as an expenditure on guest-house. In view of the concurrent finding of fact arrived by the authorities, we see no reason to entertain question (a) as framed. 3.So far as question (b) is concerned, the assessing officer disallowed an amount of Rs.63.86 lakhs for want of requisite invoices. The Tribunal upheld the order of Commissioner of Income Tax (A) holding that the respondent – assessee had furnished invoices to the extent of 90% of all the invoices. Further, the accounts were audited and the payments were made by cheques. In these circumstances, both the Tribunal and the Commissioner of Income Tax (A) held that the claim of the respondent – assessee was justified and dis-allowance of Rs.63.86 lakhs by the assessing officer was not warranted. In view of concurrent finding of fact arrived at by the Tribunal and the Commissioner of Income Tax (A), no occasion to entertain question (b) arises. 4.The appeal is accordingly dismissed with no order as to costs. (M.S. Sanklecha, J.) (J.P. Devadhar, J.)