Bombay High Court
Principal Commissioner Of Income Tax-8 vs Sumatichand Tolamal Gouti on 28 January, 2019
Author: Sandeep K. Shinde
Bench: Akil Kureshi, Sandeep K. Shinde
Rane 1/4 ITXA-1196-2016 (sr.10)
Monday, 28.1.2019
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INCOME TAX APPEAL NO. 1196 OF 2016
Principal Commissioner of
Income Tax-8 .....Appellant
V/s.
Sumatichand Tolamal Gouti ....Respondent
****
Mr. S.V. Bharucha, Advocate for the appellant.
CORAM : AKIL KURESHI, &
SANDEEP K. SHINDE, JJ.
Monday, 28 th January, 2019.
P.C. :
1. The Revenue is in Appeal against the judgment of the Income Tax Appellate Tribunal ("the Tribunal" for short). Following question is presented for our consideration :
"1. Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT was justified ::: Uploaded on - 30/01/2019 ::: Downloaded on - 30/01/2019 23:14:15 ::: Rane 2/4 ITXA-1196-2016 (sr.10) Monday, 28.1.2019 in quashing the order passed by CIT-8 u/s. 263 of the IT Act, 1961 without appreciating the facts of the case and the fact that the assessing officer while passing the original assessment order had not examined the issue of allowability of the expenditure of Rs.10,40,00,000/- to acquire marketing rights of CD's ?"
2. The issue arises in following background. . The respondent-assessee is an individual. For Assessment Year 2010-11, the return filed by the assessee was taken in scrutiny by the Assessing Officer. During the period relevant to the subject Assessment Year, the assessee had purchased CDs on Jain Religion by expending an amount of Rs.10.4 crores. However, the assessee ran into lossess since due to multiple reasons, the CDs did not sell in the market. During the scrutiny assessment, the Assessing Officer examined the entire transaction and accepted the assessee's treatment to such expenditure. The Commissioner took the order of the assessment in revision under Section 263 of the Income Tax Act, 1961 ("the Act" for ::: Uploaded on - 30/01/2019 ::: Downloaded on - 30/01/2019 23:14:15 ::: Rane 3/4 ITXA-1196-2016 (sr.10) Monday, 28.1.2019 short) on the ground that the Assessing Officer had not carried out any enquiries as to the nature of expenditure being capital or not. The assessee carried the matter in Appeal before the Tribunal. The Tribunal, by the impugned judgment allowed the assessee's Appeal holding that the Assessing Officer had carried out detailed enquiries and taken a view which was a plausible view. The Tribunal, therefore held that the Commissioner erroneously exercised the revision powers.
3. It is by now well settled that, the Commissioner can exercise revisional powers under Section 263 of the Act only when it is found that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of Revenue. In the present case, the Tribunal noted the observations of the Assessing Officer in the order of remand to the effect that Jain munis do not advocate spread of religion through use of computers, source of electronic media is usually shunned, very small section of the community uses computer technology for religious purposes ::: Uploaded on - 30/01/2019 ::: Downloaded on - 30/01/2019 23:14:15 ::: Rane 4/4 ITXA-1196-2016 (sr.10) Monday, 28.1.2019 as plenty of printed literature is available in the market. All these factors led to the market value of the CDs declining dramatically. It was on account of these reasons, that the assessee had incurred substantial loss arising out of reduction in the value of stock lying at the end of the year. The Tribunal, therefore noted that the Assessing Officer had carried out detailed enquiries and taken a plausible view.
4. We see no reason to interfere with the view of the Tribunal. No question of law arises. The Income Tax Appeal is dismissed.
(SANDEEP K. SHINDE, J) (AKIL KURESHI, J) ::: Uploaded on - 30/01/2019 ::: Downloaded on - 30/01/2019 23:14:15 :::