The Commissioner Of Income Tax, Faridabad v. M/S Porrits & Spencer (A) Ltd., 113-114, Sector 24

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.A. No. 423 of 2005 (O&M) DATE OF DECISION: 15.09.2009 The Commissioner of Income Tax, Faridabad ..........Appellant Versus M/s Porrits & Spencer (A) Ltd., 113-114, Sector 24,..........RespondentFaridabad CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MRS. JUSTICE DAYA CHAUDHARY Present:-None for the appellant. Mr. Santosh Aggarwal, Advocatefor the respondent. for the respondent. **** ADARSH KUMAR GOEL, J. (Oral) 1.The revenue has preferred this appeal under Section 260-A ofthe Income Tax Act, 1961 (for short, “the Act”) against the order of IncomeTax Appellate Tribunal, Delhi Bench 'A', New Delhi dated 8.9.2004 passedin ITA No. 1076/Del/2000 for the assessment year 1993-94, proposing toraise following substantial questions of law:- (i) “Whether the Hon'ble ITAT has erred in law inrestricting the disallowance upto the extent of Rs.77,632/- only and confirming the deletions of Rs.12,18,208/- as ordered by the CIT(A) on account ofdisallowance made by the Assessing Officerregarding foreign tour expenses for which no evidencewas led with regard to the nexus thereof withbusiness?restricting the disallowance upto the extent of Rs.77,632/- only and confirming the deletions of Rs.12,18,208/- as ordered by the CIT(A) on account ofdisallowance made by the Assessing Officerregarding foreign tour expenses for which no evidencewas led with regard to the nexus thereof withbusiness? (ii)Whether the Hon'ble ITAT has erred in law inconfirming the order of the CIT(A) in which thedisallowance of Rs. 4,15,126/- made by the Assessingconfirming the order of the CIT(A) in which thedisallowance of Rs. 4,15,126/- made by the Assessing Officer on account of personal use of car wasdeleted?deleted? (iii)Whether the Hon'ble ITAT has erred in law inconfirming the order of the CIT(A) in which thedisallowance of Rs. 2,84,072/- made by the AssessingOfficer on account of commission paid to ManagingDirector and the Executives, was deleted?confirming the order of the CIT(A) in which thedisallowance of Rs. 2,84,072/- made by the AssessingOfficer on account of commission paid to ManagingDirector and the Executives, was deleted? (iv)Whether the Hon'ble ITAT has erred in law inconfirming the order of the CIT(A) in which thedisallowance of Rs. 70,000/- made by the AssessingOfficer out of legal and professional charges, wasdeleted?”confirming the order of the CIT(A) in which thedisallowance of Rs. 70,000/- made by the AssessingOfficer out of legal and professional charges, wasdeleted?” 2.During the course of assessment year in question, theAssessing Officer disallowed foreign tour expenses on the ground thatthere was no evidence of nexus of the said expenses with the business.The Assessing Officer further disallowed expenses attributable to personaluse of car, commission paid to Managing Director and Executives andpayments towards legal and professional charges. The CIT(A) partlyupheld the claim of the assessee, which view was affirmed by the Tribunal. 3.With regard to question (i), the Tribunal followed its orders forthe earlier years in the case of the assessee. Learned counsel for theassessee submits that the order of the Tribunal for the earlier years hasattained finality. The Tribunal affirmed the finding of the CIT(A) holdingthat there was sufficient evidence showing that foreign tour was inconnection with the business of the assessee. The tour reports wereplaced on record. The purpose of the visit was to meet the foreignsuppliers of raw materials, discuss technical methods with colleaguesworking in sister concerns on product development and marketing strategy,business and export promotion. Copies of tickets were available and the expenditure incurred was factually proved. 3.With regard to question (i), the Tribunal followed its orders forthe earlier years in the case of the assessee. Learned counsel for theassessee submits that the order of the Tribunal for the earlier years hasattained finality. The Tribunal affirmed the finding of the CIT(A) holdingthat there was sufficient evidence showing that foreign tour was inconnection with the business of the assessee. The tour reports wereplaced on record. The purpose of the visit was to meet the foreignsuppliers of raw materials, discuss technical methods with colleaguesworking in sister concerns on product development and marketing strategy,business and export promotion. Copies of tickets were available and the expenditure incurred was factually proved. 4.With regard to question (ii), the Tribunal held that expenses onaccount of use of car were not personal but for business purposes. TheTribunal followed its orders for the earlier assessment years in the case ofthe assessee. Learned counsel for the assessee points out that ITA No.38of 2008 (Commissioner of Income Tax, Faridabad Vs. M/s Porrits &Spencer (Asia) Ltd.)filed by the revenue raising the same question hasbeen dismissed by this Court on 5.3.2009. 5.With regard to question (iii), it was held that commission paidto Managing Director and Executives was permissible deduction as washeld by the Tribunal for the earlier years in the case of the assessee. Thesaid view was affirmed by this Court in ITA No. 540 of 2006 (TheCommissioner of Income Tax, Faridabad Vs. M/s Porrits & Spencer(A) Ltd.)decided on 5.3.2009. 6.With regard to question (iv), it was held that the expenseswere incurred for business purposes. 7.We have heard learned counsel for the assessee and perusedthe record. 8.It is clear from above that questions (ii) and (iii) are covered byearlier orders of this Court against the revenue while questions (i) and (iv)relate to questions of fact. In view of finding recorded by the CIT(A) asaffirmed by the Tribunal, which cannot be held to be perverse, nosubstantial question of law arises. 9.Accordingly, the appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE September 15, 2009pooja (DAYA CHAUDHARY)JUDGE Note:-Whether this case is to be referred to the Reporter .......Yes/No