Commissioner Of Income Tax vs M/S. Jaipur Golden Transport Co. … on 20 September, 2010

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*       IN THE HIGH COURT OF DELHI AT NEW DELHI

+       ITA 1417/2010

COMMISSIONER OF INCOME TAX               ..... Appellant
                  Through: Ms. Suruchii Aggarwal, Advocate


                         versus


M/S. JAIPUR GOLDEN TRANSPORT
CO. (REGD)                                                     ..... Respondent

Through: None

Reserved on: 14th September, 2010
% Date of Decision: 20th September, 2010

CORAM:

HON’BLE THE CHIEF JUSTICE
HON’BLE MR. JUSTICE MANMOHAN

1. Whether the Reporters of local papers may be allowed to see the judgment? No

2. To be referred to the Reporter or not? No

3. Whether the judgment should be reported in the Digest? No

MANMOHAN, J:

CM No.16524/2010

This is an application for condonation of delay in refiling the

appeal.

For the reasons stated in the application, delay in refiling the

appeal is condoned.

Accordingly, the application stands disposed of.

ITA 1417/2010 Page 1 of 4
ITA 1417/2010

1. The present appeal has been filed under Section 260A of the

Income Tax Act,1961 (hereinafter referred to as “Act”) challenging the

order dated 27th November, 2009 passed by the Income Tax Appellate

Tribunal (in short “Tribunal”) in ITA No. 783/Del/2009 for the

Assessment Year 2003-2004.

2. In the present appeal, the revenue has raised a large number of

questions of law which are reproduced hereinbelow:-

“(i) Whether in view of the specific defects pointed out
by the Special Auditor appointed u/s 142(2A) of the Act
with regard to negative cash balances, could there be
any further onus on the part of the AO to prove
negative balances for purposes of addition under
Section 68 of the Act?

(ii) Whether the addition on account of replacement of
keyboards, mouse, modem etc. can be held to be
upgradation of computers and be treated as revenue
expenditure?

(iii) Whether in view of Section 145 of the Income-tax
Act, 1961, where hybrid system of accounting has been
dispensed with, could the expenses pertaining to
earlier assessment year be allowed in current year by
resorting to principle of consistency?

(iv) Whether expenditure on account of composite
advertisement of group companies should not be
bifurcated between the two companies especially when
bills are received in the name of the principal and, as
such, 50% of the expenses should not be disallowed in
the hands of assessee company?

(v) Whether expenditure on account of telephone,
electricity, stationery, general repairs, maintenance
etc. incurred at places where offices of the group
companies are situated can be allowed in between
companies and should not be proportionately
birfurcated in both companies?

ITA 1417/2010 Page 2 of 4

(vi) Whether ITAT is correct in holding that estimation
of unvouched expenses cannot be resorted to
particularly when it is not the case of the assessee that
all expenses are vouched?

(vii) Whether AO could not resort to fair market value
of property in absence of transfer documents?

(viii)Whether the order of the learned ITAT is perverse
as it has ignored the relevant facts on record?”

3. However, we are of the view that the aforesaid questions No. (i),

(ii), (iv), (v), (vi) and (viii) are essentially questions of fact, on which

both the Commissioner of Income Tax (Appeals) [in short, “CIT(A)”]

and the Tribunal have given concurrent findings of fact against the

revenue. We are also of the view that both the CIT(A) and the Tribunal

have given cogent reasons for arriving at their factual conclusions.

Consequently, questions No. (i), (ii), (iv), (v), (vi) and (viii) do not arise

for consideration in the present proceedings.

4. As far as question No. (vii) with regard to DVO’s report is

concerned, we have already taken a view in the assessee’s own case in

ITA No. 1387/2010 for the assessment year 2004-2005 that the said

question does not arise for consideration. Consequently, the same is

also rejected.

5. Accordingly, the present appeal is admitted only with regard to

question No.(iii) which reads as under:-

(iii) Whether in view of Section 145 of the Income-tax
Act, 1961, where hybrid system of accounting has been
dispensed with, could the expenses pertaining to

ITA 1417/2010 Page 3 of 4
earlier assessment year be allowed in current year by
resorting to principle of consistency?

6. Issue notice to the respondent, limited to question No.(iii),

returnable for 6th December, 2010.

MANMOHAN, J

CHIEF JUSTICE
SEPTEMBER 20, 2010
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