Calcutta High Court
C.I.T.Wb-I Cal vs Chloride Industries Ltd on 9 June, 2014
Author: Girish Chandra Gupta
Bench: Girish Chandra Gupta
ORDER SHEET
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction
[Income Tax]
ORIGINAL SIDE
ITA No. 326 of 2000
C.I.T.WB-I CAL.
Versus
CHLORIDE INDUSTRIES LTD.
BEFORE:
The Hon'ble JUSTICE GIRISH CHANDRA GUPTA
The Hon'ble JUSTICE SUDIP AHLUWALIA
Date : 9th June, 2014.
For Appellant : Mr.P. K. Bhowmick, Advocate
For Respondent : Mr. J. P. Khaitan, Senior Advocate with
Mrs. Nilanjana Banerjee (Pal), Advocate The Court : This appeal is directed against the judgment and order dated 15th March, 2000 passed by the learned Income Tax Appellate Tribunal. The appeal was admitted by an order dated 1st February, 2001. There is a consensus at the bar that except for the following two questions, rest of the questions are already covered by our judgement delivered today in ITA 206 of 2000.
The questions, which now require consideration, are as follows: 2
"(i) Whether on the facts and circumstances of the case the Income Tax Appellate Tribunal has legally interpreted the rule 6D of the Income Tax Rule 1962 and also section 44AA of the Income Tax Act so far as the computation of disallowance under Rule 6D admitted by the assessee had failed to maintain accounts and both the Commissioner of Income Tax (Appeal) and the Learned Tribunal reduced the disallowance under Rule 6D of the Act?"
[ii] Whether on the facts and circumstances of the case the Income Tax Appellate Tribunal was justified in law in deleting the disallowance made under Section 32AB of the Income Tax Act ?"
The learned Tribunal did not interfere with the order of the CIT(A) by which the disallowance under Rule 6D was reduced by the CIT(A) to a sum of Rs.2.25 lakhs. The learned Tribunal held as follows:
"It was contended that the expenses on company's transport service as well as car hire charges were specifically excluded from the ambit of rule 6D and only the hotel and meal expenses of Rs.7,31,488/- was hit by the said provision. Thus, the ad-hoc disallowance of Rs.5 lakh was very much on higher side in comparison to the immediately preceding previous year. Ld. CIT(A) observed that there was substantial force in the submissions of the assessee and considering the facts and circumstances, Ld. CIT(A) held that the assessing officer was not justified to disallow Rs.5 lakhs on estimate when the hotel and meal expenses incurred during the years had declined as compared to the preceding previous year by about Rs. 3 lakhs, accordingly, Ld. CIT(A) considered that disallowance of Rs.2.25 lakh would be justified in place of Rs.5 lakh. Hence, the department is in appeal before the Tribunal.
We have heard ld. representatives of the parties and on consideration of their submissions and the orders of the authorities below, we do not find any justification to 3 interfere with the order of ld. CIT(A) in the absence of any additional material on record. Therefore, Ground No.1 of the appeal is dismissed."
It is true that the learned Tribunal did not interfere with the order of the CIT(A). It is also true that the learned Tribunal did not go into the matter at all. But the fact remains that the CIT(A) gave reasons for the purpose of reducing the disallowance from Rs. 5 lakh to Rs. 2.25 lakh. These reasons were not factually assailed before the learned Tribunal nor as a matter of fact before us. We, therefore, do not find any reason to hold that the learned Tribunal took an erroneous view.
Therefore, the first question, indicated above, is answered against the revenue. The second question has to be answered in the light of the provision of Section 32AB. The relevant provision required the assessee to make the deposit before the expiry of six months from the end of the previous year. Admittedly, the previous year ended on 31st March, 1990. Six months from the end of the previous year will be 30th September, 1990. The deposit was made on 24th September, 1990.
Mr. Bhowmick was unable to explain as to why can it be said that the deposit was not made before the expiry of the six months from the end of the previous year.
For the aforesaid reasons, the second question is also answered against the revenue.
The appeal is, thus, dismissed.
(GIRISH CHANDRA GUPTA, J.) (SUDIP AHLUWALIA, J.) sm AR[CR]