Income Tax Appellate Tribunal - Delhi
Joint Commissioner Of Income Tax vs Silicon Graphics Systems India (P) Ltd. on 8 November, 2004
Equivalent citations: (2005)92TTJ(DELHI)297
ORDER
S.K. Yadav, J.M.
1. This appeal by the Revenue is directed against the order of CIT(A) on various grounds which are as under :
1. On the facts and in the circumstances of the case, the learned CIT(A) erred in deleting the addition of Rs. 4,56,44,707 being customs duty included in closing stock valuation and disallowed under Section 43B of the IT Act, 1961.
2. On the facts and in the circumstances, the learned CIT(A) erred in allowing Rs. 5,08,416 being expenditure on articles for which the assessee has not discharged its onus of providing primary facts and evidence.
3. On the facts and in the circumstances of the case, the learned CIT(A) erred in holding that the assessee-company was eligible for deduction under Section 80-O of the IT Act, 1961, and not following the order of CIT(A)-VII, New Delhi, in appeal No. 176/1997-98, dt. 3rd March, 1994, for asst. yr. 1994-95 on the same issue.
4. The order of the AO may be restored and the order of the CIT(A) may be set aside with respect to the abovementioned grounds.
2. We have heard the rival submissions and carefully perused the orders of the authorities below and documents placed on record.
3. Apropos ground No. 1, it was contended on behalf of the assessee that the impugned issue is squarely covered by the judgment of the apex Court in the case of Berger Paints India Ltd. v. CIT (2004) 266 ITR 99 (SC) and also of the Special Bench of Delhi Tribunal in the case of Indian Communication Network (P) Ltd. v. IAC (1994) 48 TTJ (Del)(SB) 604 in favour of the assessee. The contention of the assessee was not objected by the Revenue during the course of hearing. We however carefully examined the order of the CIT(A) in the light of the aforesaid judgments and we find that the findings of the CIT(A) on this issue are in consonance with the ratio laid down by the apex Court in the case of Berger Paints India Ltd. (supra). We; therefore, do not find any infirmity in the order of the CIT(A) and accordingly the same is confirmed.
4. Apropos ground No. 2, the assessee has claimed an expenditure of Rs. 10,61,832 on account of articles and gifts presented for business promotion but before the AO no details of gifts and articles were filed and the AO disallowed the entire claim of the assessee. Even before the CIT(A), the assessee could not file any details or evidence that this expenditure was incurred for business promotion but the CIT(A) allowed 50 per cent of expenditure after treating it to have been incurred on account of business promotion.
5. The Revenue is in appeal before us. The learned Departmental Representative contended that the CIT(A) has allowed 50 per cent of the claim without satisfying himself with evidence that the assessee has incurred 50 per cent of the expenditure for business promotion. Since the assessee has claimed that this expenditure was incurred for business promotion, the onus is strictly upon it to prove these facts by filing the details of gifts and articles or some other evidence. Since the assessee has failed to discharge its onus which primarily lay upon it, the CIT(A) was not justified in allowing the claim to the extent of 50 per cent of total claim.
6. The learned counsel for the assessee, on the other hand, placed reliance on the order of the CIT(A).
7. Having carefully perused the record, we find that the details of gifts and articles were not filed before the lower authorities to prove that this expenditure was incurred towards business promotion. In the absence of any concrete evidence in this regard, we find no justification in the entire claim of the assessee. Having carefully examined the order of the CIT(A), we are of the view that the CIT(A) granted 50 per cent relief without having convinced with the evidence in this regard. We, therefore, do not agree with the findings of the CIT(A) on this issue and we set aside the order of the CIT(A) on this issue and restore that of the AO.
8. Apropos ground No. 3, the learned counsel for the assessee has submitted that the claim of the assessee was disallowed by the AO in 1994-95 and 1995-96 and the disallowance was confirmed by the CIT(A) but in this year the CIT(A) instead of following his earlier order has allowed the claim of the assessee after having relied upon the judgment of the apex Court in the case of CBDT v. Oberoi Hotels (India) (P) Ltd. (1998) 97 Taxman 453 (SC) and Circular No. 187, dt. 23rd Dec., 1995. During the course of hearing a specific query was raised from the assessee as to what happened in the asst. yrs. 1994-95 and 1995-96 when the CIT(A) has disallowed the claim of the assessee. Whether the assessee has preferred an appeal to the Tribunal or has accepted the disallowance made by the assessee but the assessee did not answer these queries and remained silent. He however contended that every assessment year is an independent assessment year as such this issue should be decided in this year independently without taking into consideration the decision of the CIT(A) for asst. yrs. 1994-95 and 1995-96.
9. Having considered the rival submissions and from careful perusal of the record, we find that in asst. yrs. 1994-95 and 1995-96, similar claim was disallowed by the AO which was later on confirmed by the first appellate authority. Since the assessee is not able to tell the fate of the disallowance, we are forced to presume that it might have been accepted the order of the CIT(A) or the Tribunal has also confirmed the disallowance. In these circumstances, if the disallowance has been confirmed in the earlier years, the same reasons should be followed in this year in view of the rule of consistency. No doubt, the principles of res judicata are not applicable in the income-tax proceedings but the authorities should not take a different view unless and until some contrary facts are brought on record. In the instant case, the CIT(A) has referred the matter back to the file of the AO for computing the deduction under Section 80-O by passing an speaking order. We are, therefore, of the view that since the complete facts are not brought on record about the fate of the disallowance made by the CIT(A) in the earlier years, we restore the matter to the file of the AO to decide the issue in the light of the final decision taken in the asst. yrs. 1994-95 and 1995-96 and also in the light of the judgments of the Tribunal in the case of Overseas Merchandise Inspection Co. (India) (P) Ltd. v. Dy. CIT (2002) 80 ITD 176 (Cal) and the judgment of jurisdictional High Court in the case of E.P.W. DaCosta and Am. v. Union of India (1980) 121 ITR 751 (Del) and also in the light of CBDT Circular No. 700, dt. 23rd March, 1995. Accordingly, we modify the directions of the CIT(A) and restore the matter to the AO to adjudicate this issue of deductions independently in the light of the ratios laid down in the aforesaid cases.
10. In the result, the appeal of the Revenue is partly allowed for statistical purposes.