2014 (3) TMI 1095 - HC - Income Tax

Allowability of maintenance expenditure - Business expenditure - similar dis-allowances were made by the assessing officer and were deleted by the said Appellate Tribunal - Held that - In paragraph 8 of the order under challenge these are the very fact which are referred to by the Tribunal in dismissing the Department s appeal. The findings are essentially factual and rendered in the backdrop of the material produced. They are consistent therewith. The Assessee was maintaining the premises as business centre. The maintenance expenditure required for maintenance of such commercial premises has thus been upheld. The quantum of 60 lakhs was held not to be unreasonable considering the nature of the business and the total investment of 5.25 crores. In the light of the above we do not see as to how substantial question of law arises for consideration and determination in this appeal. We find that the appeal cannot be entertained because the attempt is to re-appreciate and reappraise the factual material. That is impermissible when the findings are not vitiated by any error of law apparent on the face of the record or perversity.

Summary

Issues:
Assessment year 2007-2008 - Dismissal of appeal by Income Tax Appellate Tribunal - Maintenance expenditure for commercial premises - Quantum of expenditure considered reasonable.

Analysis:
The judgment pertains to the dismissal of an appeal by the Income Tax Appellate Tribunal concerning the assessment year 2007-2008. The Tribunal found that the Commissioner of Income Tax had followed a consistent course in relation to prior assessment years 2005-2006 and 2006-2007, where similar disallowances were made by the assessing officer but later deleted by the Appellate Tribunal. However, the Tribunal deemed this approach erroneous and upheld the stand of the assessee for those assessment years. The Tribunal noted that the maintenance expenditure for the commercial premises, amounting to Rs. 60 lakhs, was not unreasonable given the nature of the business and the total investment of Rs. 5.25 crores.

The High Court, in its analysis, observed that the findings of the Tribunal were factual and consistent with the material produced. The court emphasized that the maintenance expenditure for the business center was justified, considering the significant investment made. The court further stated that no substantial question of law arose for consideration in the appeal, as the attempt was to re-evaluate factual material, which is impermissible unless there is an error of law or perversity in the findings. Consequently, the court found the appeal devoid of merit and dismissed it accordingly.