The Commissioner Of Income-Tax, Patiala v. M/S Punjab Tractors Limited, Mohali

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No. 23 of 2002 D.O.D.: 26.04.2010 The Commissioner of Income-tax, Patiala ..Appellant Versus M/s Punjab Tractors Limited, Mohali ...Respondent CORAM:HON'BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE JITENDRA CHAUHAN Present:Ms. Urvashi Dhugga, Advocate, for the appellant-revenue. Mr. Pankaj Jain, Advocate, for the respondent-assessee. 1.To be referred to the Reporters or not?2.Whether the judgment should be reported inthe Digest? M.M. KUMAR, J. The revenue is in appeal under Section 260-A of the Income-taxAct, 1961 (for brevity, ‘the Act’), against the order dated 22.6.2001, passed bythe Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh, in I.T.A.No. 1179/Chandi/1994, in respect of Assessment Year 1988-89. When theappeal was admitted on 21.7.2003, the Division Bench has framed the followingsubstantive question of law:- “Whether in the facts and circumstances of the case, the ITAT wasright in law in allowing rent for Guest House u/s 30 of the I.T. Act,1961 and provisions of section 37(1) and 37(4) were not attractedin this case?” 2.Brief facts of the present case are that return of income in respectof the assessment year 1988-89, was filed on 27.12.1988 declaring total incomeat Rs. 47,59,540/-. The Assessing Officer after conducting assessmentproceedings, vide order dated 5.2.1990, made additions of (i) Rs. 4,67,025/-under Section 37(2A) of the Act for non-production of evidence relating toentertainment expenses; (ii) Rs. 1,33,800/- under Section 37(3) of the Act onaccount of maintenance of Guest House; (iii) Rs. 65,939/- under Section 40A(5)of the Act for exceeding the limit of expenditure; and Rs. 21,62,939/- underSection 80HHC of the Act because the respondent-assessee failed to furnish theprescribed form and the report of the Accountant along with the return asrequired under sub-section (4) of Section 80HHC. Against the order passed bythe Assessing Officer, the respondent-assessee filed an appeal under Section250(6) of the Act before the CIT (A), Patiala. The CIT (A), vide order dated22.8.1994, allowed relief of 50% on the first issue. On the second issue, it hasbeen held that the rent paid for guest house is covered under Section 30 and thesame can be allowed. Therefore, the addition of Rs. 1,33,800/- was deleted.Similarly, by following the order of the Tribunal relating to earlier years, theCIT (A) deleted the additions of Rs. 65,939/- as also addition of Rs. 21,62,792/-while relying upon its own order passed in respect of earlier year in the case ofthe respondent-assessee. The appellant-revenue then preferred an appeal beforethe Tribunal. The Tribunal has upheld the order passed by the CIT(A) anddismissed the revenue’s appeal vide impugned order dated 22.6.2001. 3.Feeling aggrieved the revenue has approached this Court and asubstantive question of law noticed in para 1 of this order has been framed bythe Division Bench on 21.7.2003. 4.Ms. Urvashi Dhugga, learned counsel for the revenue has pointed out that the substantive question of law framed in the instant appeal standalready answered in the appeal of the assessee-respondent, namely, I.T.A. No.60 of 2001, today itself and, therefore, no debate on the issue is necessary.5.Mr. Pankaj Jain, learned counsel for the respondent-assessee at theoutset has conceded that the substantive question of law raised in this appealalready stands answered against the assessee in ITA No. 60 of 2001 (PunjabTractors Limited, Mohali v. Commissioner of Income Tax, Patiala), which hasbeen decided by us vide a separate order of even date. Accordingly, the instantappeal is also allowed in terms of the order passed in ITA No. 60 of 2001. Thequestion is decided in favour of the appellant-revenue and against therespondent-assessee. (M.M. KUMAR)JUDGE April 26, 2010 (JITENDRA CHAUHAN) JUDGE Pkapoor