M/S Vithal Overseas, Vasant Vihar, Jalandhar v. Commissioner Of Income Tax-2, Jalandhar

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. ITA No.713 of 2008 (O&M)Date of decision: 15.7.2009 M/s Vithal Overseas, Vasant Vihar, Jalandhar Vs. Commissioner of Income Tax-2, Jalandhar -----Appellant Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOELHON'BLE MRS. JUSTICE DAYA CHAUDHARY Present:-Mr. Ravish Sood, Advocate for the appellant. Adarsh Kumar Goel,J. 1.The assessee has preferred this appeal under Section260A of the Income Tax Act, 1961 (in short, ‘the Act’) against theorder of the Income tax Appellate Tribunal, Amritsar Bench,Amritsar, dated 6.6.2008, passed in ITA No.81(ASR)/2008 for theassessment year 2004-05, proposing to raise four substantialquestions of law, out of which learned counsel for the appellantpressed only question Nos. 1 and 2, which are as under:- 1.Whether the Tribunal had gravely erred inlaw and acted in gross violation of the‘Principles of Natural Justice’ by refusing toafford any opportunity to the counsel for thelaw and acted in gross violation of the‘Principles of Natural Justice’ by refusing toafford any opportunity to the counsel for the appellant firm to produce documentaryevidences as regards issues which were notin dispute before the Tribunal? 2.Whether the Tribunal had erred in law andexceeded its jurisdiction by not confiningitself to the matter in issue in the appealbefore it and deciding the appeal before it infavour of the revenue/department ongrounds not in controversy?” 2. The assessee made a claim for deduction ofRs.5,88,500/- towards expenditure on foreign travel of SunilKumar Malhotra, son of one of the partners. The claim wasdisallowed for want of evidence. On appeal, the claim was allowedexcept for 10% attributable to personal expenses. The CIT(A)observed that the expenditure had been incurred by cheque andthere was nexus with the business purpose. On appeal of therevenue before the Tribunal, the view taken by the CIT(A) was setaside. It was held that the assessee had not led any evidence thatvisit of Sunil Kumar Malhotra was necessary to facilitatenegotiations with foreign buyers. There was no evidence of anynegotiations which may have taken place. There was also noevidence that Sunil Kumar Malhotra had special aptitude with regard to business of the assessee nor there was any evidence toshow that he was representative of the assessee. 3.Learned counsel for the appellant submits that theTribunal ought to have given further opportunity, as the Tribunalwas dealing with a ground, which was beyond the grounds raisedand under Rule 12 of the Income Tax Rules, 1962, if a new groundwas taken, which was beyond the originally pleaded ground, anopportunity to lead evidence was required. Reliance has beenplaced on judgments of this Court in CIT, Patiala II v. Dehati--Cooperative MarketingcumProcessing Society, (1981) 130ITR 504 and Oriental Building and Furnishing Company v.CIT, Delhi, (1952) 21 ITR 105.4.We are unable to hold that the questions raised aresubstantial questions of law. Whether evidence is to be allowed, isa matter of discretion depending upon a fact situation. In thepresent case, the issue dealt with was assessee’s claim fordeduction of amount towards expenses incurred by Sunil KumarMalhotra on foreign travel. The assessee had all the opportunitybefore the Assesing Officer to produce evidence that Sunil KumarMalhotra was representing it and expenditure was genuinelyincurred for business purpose. No doubt, the CIT(A) accepted theplea of the assessee, the Tribunal was entitled to go into the correctness of the said finding and take its own view byappreciation of evidence. There was no obligation on the part ofthe Tribunal to allow further evidence as no new point was raised.The question of issue being the genuineness of the expensesincurred for business purpose on visit of Sunil Kumar Malhotra,representing the assessee, the judgments relied upon aredistinguishable. 5.The questions raised cannot be held to be substantialquestions of law. 6.The appeal is dismissed. (Adarsh Kumar Goel) Judge July 15, 2009‘gs’ (Daya Chaudhary)Judge