Pr. Commissioner Of Income Tax- 4Through v. Holtech Consulting Pvt. Ltd.through:ms. Monika Ghai, Advocate

$~43 *IN THE HIGH COURT OF DELHI AT NEW DELHI +ITA 163/2017 PR. COMMISSIONER OF INCOME TAX- 4Through: ..... AppellantMr. Zoheb Hossain, Advocate. Versus HOLTECH CONSULTING PVT. LTD.Through:Ms. Monika Ghai, Advocate. ..... Respondent CORAM:HON'BLE MR. JUSTICE S. RAVINDRA BHATHON'BLE MR. JUSTICE NAJMI WAZIRIO R D E R%20.02.2017 1.The Revenue in its appeal under Section 260A of the Income Tax Act,1961 (hereinafter to be referred as ‘the Act’) urges four questions of law.2.It is not in dispute that two questions i.e. the depreciation claim to theextent of 60% on purchase of computer peripherals and the disallowanceunder Section 14A of the Act, are covered by the previous judgments of thisCourt [CIT Vs. BSES Yamuna Power Limited [2013] 358 ITR 47andMaxopp Investment Ltd. Vs.ACIT (2012) 347 ITR 272 (Delhi)]. In thesecircumstances, no question of law arises on that account. 3.The third question urged is with respect to the addition ofRs.98,25,697/- made out over Rs.3,00,000,00/- paid to the two Directors ascommission by the assessee. Applying provisions of Section 36(1) (ii) ofthe Act, Assessment Officer (for short ‘AO’) ruled that the payments wereITA 163/2017Page 1 of 3 excessive. This view was confirmed by the CIT (A). In appeal, the IncomeTax Appellate Tribunal (ITAT) took note of the assessee’s contentions thatsuch payments conformed to the previous pattern and that having regard to thequalifications and the contributions of these two Directors, which is linked withtheir performance – the payments were not excessive.This Court is of theopinion that the observations of the ITAT are reasonable and that theperformance based commission could not have been examined in an isolatedmanner without comparison with the payments made during the past years or toother employees, who received the same remuneration (though not to the sameextent). No substantial question of law arises on this count. 4.The last question of law, similarly, is factual with respect to the debtswritten off. The AO and the CIT(A) were of the opinion that the assessee hadnot disclosed any details or particulars with respect to these debts or receivablein the past. The ITAT held as follows:- “9.7 The Ld. AR had referred to page 89 of the paper bookwherein the bad debts written off have been claimed in theprofit and loss account for the year under consideration. Onperusal of the notes to the audited accounts No. 20 (9) refersto the return of debts which includes the dead (sic) fromprevious years. During assessment proceedings the Ld. AOwas well possessed with these details, to prove that the debtswere written off.A similar issue arose before Hon’bleSupreme Court in the case of M/s. Vijay Bank versus CIT andAnr., reported in (2010) 190 taxman 257 wherein the Hon 'blecourt has held that an assessee debits the amount of bad debtsto the profit and loss account and credits the said account itwould constitute a write-off of actual bad (sic). In the light ofthe ratio laid down by Hon 'ble Supreme Court in the case ofM/s Vijaya bank Vs.CIT (supra) the claim of bad debts standsallowed.”wherein the bad debts written off have been claimed in theprofit and loss account for the year under consideration. Onperusal of the notes to the audited accounts No. 20 (9) refersto the return of debts which includes the dead (sic) fromprevious years. During assessment proceedings the Ld. AOwas well possessed with these details, to prove that the debtswere written off.A similar issue arose before Hon’bleSupreme Court in the case of M/s. Vijay Bank versus CIT andAnr., reported in (2010) 190 taxman 257 wherein the Hon 'blecourt has held that an assessee debits the amount of bad debtsto the profit and loss account and credits the said account itwould constitute a write-off of actual bad (sic). In the light ofthe ratio laid down by Hon 'ble Supreme Court in the case ofM/s Vijaya bank Vs.CIT (supra) the claim of bad debts standsallowed.” 5.This Court is of the opinion that the discussion here is also factual.Hence, no question of law arises.