The Commissioner Of Income Tax – 7, Mumbai v. National Organic Chemical Industries Ltd., Mumbai

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.3033 OF 2009 The Commissioner of Income Tax – 7, Mumbai ..Appellant. Versus National Organic Chemical Industries Ltd., Mumbai ..Respondent. Mr.Suresh Kumar for the appellant.None for the respondent. CORAM : Dr.D.Y. Chandrachud & J.P. Devadhar, JJ. DATE : 6 July, 2010. P.C. : 1.The Revenue has raised six questions of law in its appeal against the decision of the Income Tax Appellate Tribunal. The relevant assessment year is 1988-89. 2.As regards question (a), the Tribunal has recorded a finding of fact that the donation was made on the ground of commercial expediency for the benefit of the business and was, therefore, allowable as revenue expenditure. Having regard to this finding, no substantial question of law would arise. 3.As regards question (b), we do not find any clarity in the order of the Tribunal on the question of dis-allowance of Rs.8,00,000/- out of the penalty of Rs.50,00,000/- paid to the customs authorities. The Tribunal has held that this issue is similar to ground (iv) in the Revenue’s appeal for assessment year 1988-89 and has referred to its own order dated 5 October 2001. The appeal in question relates to assessment year 1988-89. In para 75 of the judgment, the Tribunal has similarly referred to the order of the Tribunal dated 5 October 2001 for assessment year 1988-89, which appears to have been an error. In the circumstances, we consider it appropriate to restore question (b) for decision afresh by the Tribunal after hearing the parties. 4.Learned Counsel appearing on behalf of the Revenue states that questions (c), (e) and (f) are covered against the Revenue by the judgment in Income Tax Appeal No.3025 of 2009 rendered today. In view of the statement, these questions will not give rise to any substantial question of law. 5.As regards question (d), the Tribunal has noted that by an order of the CEGAT an amount of Rs.50,00,000/- was as a matter of fact refunded to the assessee and that amount was subsequently offered to tax in the assessment year 2002-03. In these circumstances, question (d) will not raise any substantial question of law. 6.We, accordingly dispose of the appeal. There shall be no order as to costs. (J.P. Devadhar, J.) (Dr.D.Y. Chandrachud, J.)