Principal Commissioner Of Income Tax-1, Kolkata v. M/S. Dunlop India Ltd. ………

Form No. IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE PRESENT:THE HON’BLE JUSTICE T.S. SIVAGNANAMAndTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYA ITAT/170/2021IA NO:GA/1/2021 PRINCIPAL COMMISSIONER OF INCOME TAX-1, KOLKATAVS. M/S. DUNLOP INDIA LTD.………ITAT/170/2021IA NO:GA/2/2021 PRINCIPAL COMMISSIONER OF INCOME TAX-1, KOLKATAVS. M/S. DUNLOP INDIA LTD.……… For the appellant: Mr. P. B. Bhowmik, Adv. For the respondent: None appears. Heard on : January 25, 2022. Judgement on : January 25, 2022. RE: IA NO:GA/1/2021 T.S. SIVAGNANAM, J. : We have heard Mr. Bhowmik, learned senior standing counsel for the appellant/revenue. There is a delay of720 days in filing this appeal. Though in the affidavit filed in supportof the condone delay petition the dates and events have been given.They are all administrative delay and the revenue cannot take anyspecial privilege for not filing the appeal within the period of limitation. However, considering the fact that the respondent/assesseehas already gone into liquidation and the company was notrepresented before the Tribunal and considering the nature of theissue, with consent of the learned senior standing counsel for theappellant we are inclined to take up the main appeal itself. Therefore,we exercise discretion and condone the delay. Accordingly, the delayin filing this appeal is condoned. The application, IA NO.GA/1/2021 stands disposed ofaccordingly. RE: ITAT/170/2021 This appeal by the revenue filed under Section 260A of theIncome Tax Act, 1961, (the Act, in brevity) is directed against theorder dated 31.7.2019 passed by the Income Tax Appellate Tribunal,“C” Bench, Kolkata (Tribunal) in ITA Nos.621 & 897 (Cal) of 1996 forthe assessment year 1992-93. The revenue has raised the followingsubstantial questions of law for our consideration. a.Whether on the facts and circumstances of the case andin law, the Learned Income Tax Appellate Tribunal, haserred in facts as well as in law in allowing CapitalPayment towards purchase of knowhow wrongly claimedas Royalty Revenue Expenditure ?in law, the Learned Income Tax Appellate Tribunal, haserred in facts as well as in law in allowing CapitalPayment towards purchase of knowhow wrongly claimedas Royalty Revenue Expenditure ? b.Whether in the facts and in law method of payment is notconclusive to determine the nature of payment as Capitalor Revenue Expenditure ?conclusive to determine the nature of payment as Capitalor Revenue Expenditure ? We have heard Mr. Bhowmik, learned senior standing counselfor the appellant. The issue pertains to the disallowance of a certain a.Whether on the facts and circumstances of the case andin law, the Learned Income Tax Appellate Tribunal, haserred in facts as well as in law in allowing CapitalPayment towards purchase of knowhow wrongly claimedas Royalty Revenue Expenditure ?in law, the Learned Income Tax Appellate Tribunal, haserred in facts as well as in law in allowing CapitalPayment towards purchase of knowhow wrongly claimedas Royalty Revenue Expenditure ? b.Whether in the facts and in law method of payment is notconclusive to determine the nature of payment as Capitalor Revenue Expenditure ?conclusive to determine the nature of payment as Capitalor Revenue Expenditure ? We have heard Mr. Bhowmik, learned senior standing counselfor the appellant. The issue pertains to the disallowance of a certain sum of money out of the technical purchase account. The assessingofficer while completing the assessment for the assessment year underconsideration (AY 1992-93) disallowed the same on the basis of anorder giving effect to the appellant’s order passed by theCommissioner of Income Tax (Appeals) dated 16.2.1995 for theassessment year 1987-88. The assessee was on appeal before theCommissioner of Income Tax (Appeals)-V, Calcutta (CIT(A)). Theassessee produced a comparative chart and demonstrated before theCIT (A) that the same nature of expenses were allowed as businessexpenditure in the earlier assessment years up to the assessment year1990-91. Further, it was stated that in an appeal filed against theorder of the assessing officer for the assessment year 1987-88 givingeffect to the order passed by the CIT (A), by order dated 16.10.1995 inappeal no.128/Spl.23/V/94-95, the CIT (A) allowed the entiretechnical purchase amount as deduction. Further, before the CIT (A)the assessee filed the second order passed by the CIT (A) for theassessment year 1987-88 and for the assessment year 1990-91.Considering all these orders including the order for the assessmentyear 1990-91 dated 19.12.1995 the CIT (A) granted relief to theassessee and directed the assessing officer to allow the entireexpenditure on technical purchases and charges as businessexpenditure. There were other issues which were either decided for oragainst the assessee. Thus, the revenue as well as the assessee wereon appeal against the various orders for the assessment years 1985-86, 1986-87, 1987-88, 1988-89, 1989-90, 1992-93, 1993-94, 1997-98. Cross objection was filed by the assessee for the assessment year 1985-86. This appeal was filed before the Tribunal in the year 1992.The Tribunal in the impugned order records that several notices weresent to the assessee as well as the official liquidator asked by them therespondent was under the process of liquidation. The Tribunal furtherrecords that the counsel, who had filed vakalats also withdrawn thevakalats. Thus, it appears that the assessee was not represented. Bethat as it may, the Tribunal has considered this issue and inparagraph 8 of the order it has dismissed the revenue’s appeal.Considering the fact that for several assessment years the assesseewas granted relief and those orders also having become final, theTribunal was fully justified in rejecting the revenue’s appeal andconfirming the order passed by the CIT (A). Thus, we find there is noerror committed by the Tribunal in the decision making process or inthe decision itself. Thus, the revenue has not made out any ground tointerfere with the order of the Tribunal. Accordingly, the appeal failsand dismissed and the substantial questions of law are answeredagainst the revenue. The stay application, IA NO.GA/2/2021 also stands dismissed. (T.S. SIVAGNANAM, J.) I agree. (HIRANMAY BHATTACHARYYA, J.)