Madhya Pradesh High Court
Commissioner Of Income-Tax vs Pure Pharma Pvt. Ltd. on 4 November, 2004
Equivalent citations: (2005)199CTR(MP)396, [2005]277ITR273(MP)
Author: A.M. Sapre
Bench: A.M. Sapre
JUDGMENT
A.M. Sapre J.
1. This is an appeal filed by the Revenue (Income-tax Department) under Section 260A of the Income-tax Act, 1961, against an order, dated April 16, 2004, passed by the Income-tax Appellate Tribunal in I. T. A. No. 840/IND of 1998.
2. Heard Shri R. L. Jain with Ku. V. Mandlik, learned counsel for the appellant-Revenue.
3. The question involved is, whether an amount of Rs. 38,91,871 was allowable business expenditure in the assessment year in question and whether the same was rightly allowed by the Commissioner of Income-tax (Appeals) and the Tribunal ?
4. Both the Commissioner of Income-tax (Appeals) and the Tribunal examined the nature of expenditure claimed by the assessee as one of the item of deletion. It was found as a fact that the expenses claimed by the assessee were actually incurred by them because payments to every party were made by DD/cheques and that confirmatory letters were filed. In other words, these payments were held to be genuine in nature and were found to be actually incurred in the course of business activity as business expenditure. It was also held that these payments were made to those persons who were involved in obtaining tenders for the assessee and who rendered their personal services to enable the assessee to get better business in the market. It was after recording this factual finding in favour of the assessee, the expenditure in question was held as business/revenue expenditure and accordingly allowed to be deducted from the gross total income.
5. We find no case to interfere in such finding of fact in our appellate jurisdiction under Section 260A ibid. If it is found as a fact that the assessee has incurred expenditure then the Revenue has no right to say that no such expenditure is called for or can be incurred or it is not necessary. It is for the assessee to prove the expenses and the manner in which it is to be incurred in its commercial expediency to run their business effectively. Any lawful payment if found incurred in the course of business for running the business is an allowable deduction.
6. In this view of the matter, no case for interference is called for in the impugned order which does not involve any substantial question of law.
7. The appeal is thus found to be totally devoid of substance. It is dismissed in limine.