The Commissioner Of Income Tax-12 v. M/S. Sunrise Exports

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.4119 OF 2010 The Commissioner of Income Tax-12..Appellant.Vs. M/s. Sunrise Exports...Respondent. .... Mr. D.K. Kamwal, for the Appellant.Ms. Bina Pillai, for the Respondent. .... CORAM : J. P. DEVADHAR & A.R. JOSHI, JJ. P.C. DATED : 30th NOVEMBER, 2011. 1.Whether the ITAT was justified in confirming the order of CIT(A) and deleting the disallowance of expenses made by the Assessing Officer on the basis of the bills produced by the assessee in the appellate proceeding without giving an opportunity to the Assessing Officer to verify the said bills, is the question raised in this appeal. 2.The assessment year involved herein is A.Y. 2005-06. 3.The assessee Firm is engaged in the business of export of plant, machinery and equipments. Pursuant to an agreement entered into with Paras Industries Pvt. Ltd., Colombo, Sri Lanka, the assessee was to supply complete plant with an obligation to erect and commission the same. 4.In the assessment year in question, the assessee claimed deduction of incidental expenses like rent, traveling expenses, fright charges and export expenses. The Assessing Officer disallowed the claim of the assessee on the ground that the said expenses as per the agreement were to be charged to Paras Industries Pvt. Ltd., Colombo and the assessee having failed to recover the same from the Srilankan party cannot avail deduction of that amount. 5.On appeal, filed by the assessee, the CIT(A) allowed the assessee to produce the bills to establish that the sale invoices included the expenditure incurred on the items on which deduction was claimed by the assessee. On verification of the said sale invoices the CIT(A) as also the ITAT have held that the assessee’s claim that the expenditure incurred by the assessee which are recovered from the Srilankan party have to be deduced in computing the business income especially when there is no dispute regarding the expenditure actually incurred by the assessee. 6.It is relevant to note that the Revenue had not raised any argument before the ITAT that the bills produced by the assessee before the CIT(A) were bogus or that the said bills ought to have been sent to the Assessing Officer for verification. Since, the said argument was not canvassed before the ITAT, it is not open to the Revenue to raise the said contention for the first time before this Court. 7.In the result, as the decision of the ITAT is based on finding of fact and it is not demonstrated before us that the sale bills produced by the assessee are bogus, we see no reason to entertain the Appeal. Accordingly, the Appeal is dismissed. (A. R. JOSHI, J.) (J. P. DEVADHAR,J.)