The Commissioner Of Income Tax Rohtak v. M/S Haryana Minerals Limited

In the High Court for the States of Punjab and Haryana at Chandigarh… (i) The Commissioner of Income Tax Rohtak Versus M/s Haryana Minerals Limited. Assessment Year 1993-94. (ii) ITA No. 363 of 2004Date of decision: 29.2.2008 .. Appellant .. Respondent ITA No. 364 of 2004 Date of decision: 29.2.2008 The Commissioner of Income Tax Rohtak Versus M/s Haryana Minerals Limited. Assessment Year 1994-95 .. Appellant .. Respondent Coram: Hon’ble Mr.Justice Satish Kumar Mittal Hon'ble Mr.Justice Rakesh Kumar Garg Present:Mr.Yogesh Putney, Advocatefor the appellant-Revenue. Rakesh Kumar Garg,J 1.This judgment shall dispose of ITA No.363 and 364 of 2004 as theproposed substantial questions of law involved in both the appeals are similar.For the sake of disposal of these appeals, the facts are being taken from ITANo.363 of 2004. 2.The Revenue has filed this appeal under Section 260-A of theIncome Tax Act, 1961 (for brevity “the Act”) challenging the order dated22.1.2004, passed by the Income Tax Appellate Tribunal, Delhi Bench “A” NewDelhi( for brevity,”the Tribunal”), in ITA No.1080/Del/2000, in respect ofAssessment Year 1993-94 raising the following substantial questions of law forour determination:- (a) Whether on the facts and in the circumstances of the case,the ITAT was right in law in holding that in any case, if anyaddition is required to be made for perks, the same can bemade in the hands of the M.D. of the Company but nodisallowance is called for in the hands of the Company and thusdeleted the addition of Rs.66,221/- on account of car expensesincluding insurance and depreciation for personal use of thecar? b) Whether on the facts and in the circumstances of the case,the ITAT was right in law in sustaining the order of CIT (A)deleting the addition of Rs.7,00,037/- made on account ofunutilized contract receipts collected in the shape of labourwelfare fund? 3.Briefly the facts of the case are that during assessment year 1993-94 the assessee collected Rs.13,70,548/- and spent Rs.6,70,511/-. The balanceleft over at the end of the year at Rs.7,00,037/- was disclosed as a liability. Thedecision to collect Re.1/- per truck from the contractor was taken in the meetingof Board of Directors on 16.3.90 so as to create a labour welfare fund. The fundwas to be utilized for the purpose of labour welfare activities at various mines. Aseparate bank account was opened where all these collections were keptseparately. The Assessing Officer treating these collections as trading receipts ofthe assessee brought to tax the amount of Rs.7,00,037/- the unspent balancesas income for assessment year 1994-95. Likewise Rs.788299/- have beenbrought to tax as trading receipts for assessment year 1995-96. 4.The Commissioner of Income Tax(A) treated this amount as aliability of the assessee by following the decision of Hon'ble the Supreme Courtof India in Commissioner of Income Tax Versus Bizli Cotton Mills Pvt. Ltd.Versus (1979) 116 ITR 60(SC) and a judgment of this Court in the case ofCommissioner of Income Tax Versus Gheru Lal Bal Chand111 ITR 134. Theappeal filed by the Revenue against the order of the Commissioner of Income 5.It is pertinent to mention here that vide order dated 1.10.2007, thisCourt has found that the question No.1 as proposed by the appellant is aquestion of fact and therefore, does not require consideration in exercise ofjurisdiction under Section 260 A(1) of the Act. 6.On the second question, vide order dated 1.10.2007, this Courtfound that to appreciate this question, it would be necessary to have the breakup of the total amount calculated by the assessee, which is not discernible fromthe order. The Revenue placed on record details of LWC Receipts of variousprojects month wise for the Assessment Year 1993-94. 7.We have heard learned counsel for the Revenue. 5.It is pertinent to mention here that vide order dated 1.10.2007, thisCourt has found that the question No.1 as proposed by the appellant is aquestion of fact and therefore, does not require consideration in exercise ofjurisdiction under Section 260 A(1) of the Act. 6.On the second question, vide order dated 1.10.2007, this Courtfound that to appreciate this question, it would be necessary to have the breakup of the total amount calculated by the assessee, which is not discernible fromthe order. The Revenue placed on record details of LWC Receipts of variousprojects month wise for the Assessment Year 1993-94. 7.We have heard learned counsel for the Revenue. 8.It is pointed out by the learned counsel that the amount in questionwas paid by the Contractor for the welfare of the labourers at mines. This amountnever reached the assessee as his own income as the assessee had anobligation to utilize the amount so received for a set purposes of welfare fund.The amount which remained unspent at the end of the year was not assessee'sown money but a liability. Thus the Tribunal did not commit any error indismissing the appeal of the Revenue. Our view also finds support from thedecision of the Apex Court in Commissioner of Income Tax Versus SitaldassTirathdass41 ITR 367(SC). 9.Even otherwise, from the details of staff and labour welfareexpenditure for Assessment Year 1993-94 incurred by the respondent-assessee,it is clear that a very little amount was left as balance in the labour welfare fund. 8.In view of this also, no interference is called for in the order of theTribunal. Thus, the appeals are dismissed as no substantial question of lawsurvives for determination of this Court. RAKESH KUMAR GARG) JUDGE February 29,2008 nk (SATISH KUMAR MITTAL) JUDGE