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TAXAP/101/2009 3/ 3 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 101 of 2009
=========================================================
COMMISSIONER
OF INCOME TAX - Appellant(s)
Versus
CORE
HEALTHCARE LIMITED - Opponent(s)
=========================================================
Appearance
:
MRS
MAUNA M BHATT for
Appellant(s) : 1,
None for Opponent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE K.A.PUJ
and
HONOURABLE
MR.JUSTICE RAJESH H.SHUKLA
Date
: 15/02/2010
ORAL
ORDER
(Per
: HONOURABLE MR.JUSTICE K.A.PUJ)
1. The
Commissioner of Income Tax, Central-I, Ahmedabad has filed this Tax
Appeal under Section 260A of the Income Tax Act, 1961 for assessment
year 1993-1994 proposing to formulate the following substantial
questions of law for determination and consideration of this Court.
(A) Whether
on the facts and under the circumstances of the case, the Appellate
Tribunal is justified in law in upholding the order of the CIT(A)
allowing condonation of delay for more than three years in filing
appeal before him, without considering the fact that each day delay
has to be explained by the assessee and in the fact assessee has
failed in this regard ?
(B) Whether
on the facts and under the circumstances of the case, the Appellate
Tribunal is justified in law in allowing expenditure of
Rs.50,01,380/- on free distribution of I.V. Sets in relation to a new
project, which was yet to start, without considering the legal
position that for claiming expenditure u/s.37(1) of the Act, the same
should be wholly and exclusively for the purpose of business
and being not so, the same was rightly capitalized with the cost of
new project ?
2. Heard
Mr. Manish R. Bhatt, learned Senior Counsel appearing with Mrs. Mauna
M. Bhatt, Standing Counsel for the revenue and perused the orders
passed by the authority below.
3. So
far as the Question No.(A) is concerned, it is in relation to the
condonation of delay. The Tribunal, after considering the facts of
the case, has found that the explanation tendered by the assessee is
reasonable and CIT(A) has rightly condoned the delay. This being the
exercise of discretionary powers by the CIT(A) and the Tribunal
having confirmed the same, we do not see that any substantial
question of law arises out of the order of the Tribunal.
4. So
far as the Question No.(B) is concerned, the Tribunal has given a
specific finding that bona-fide of the expenditure is not in dispute
and also given its finding that the product in question does not
amount to either a new product or a new business. The assessee is
already in the business of such product. The Tribunal has further
recorded the finding that at the new project Sachana it proposes to
manufacture parental, IV Fluids, injectible syringes, plastic sets,
blood bags, etc. and in fact, IV sets a product in which it trades in
on a regular basis, was not intended to be manufactured at the said
manufacturing site. Since the Tribunal has recorded this specific
finding on both the issues viz. the expenditure incurred is a revenue
expenditure and also the product was the same product in which the
assessee was dealing, the expenditure was rightly considered as
revenue expenditure under Section 37(1) of the Act. The CIT (Appeal)
has given a direction to the Assessing Officer to examine and verify
the nature of the expenses and if it was old business, the same has
to be allowed. The Tribunal, as a matter of fact, found that the
expenditure was in relation to the old business. In this view of the
matter, we are of the view that no substantial question of law arise
out of the order of the Tribunal. We, therefore, dismiss this Tax
Appeal.
(K.A.
Puj,J.) (Rajesh H. Shukla,J.)
rakesh/
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