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TMI Blog2012 (5) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... d no other services have been rendered which is over and above this Technical Assistance Agreement - also held that the expenditure is not wholly and exclusively for business purposes –the disallowable expenditure which is not allowable under the I.T. Act the particular company cannot be indirectly allowed to CMD like entertainment or perks disallowable u/s. 37, 40A and 40(c) – against assessee. - ITA No. 217 of 2002 - - - Dated:- 17-4-2012 - MR. JUSTICE M.M.KUMAR, MR. JUSTICE ALOK SINGH, JJ. Mr.Rajesh Katoch , Advocate for the petitioner Mr. Alok Mittal, Advocate for the respondent. M.M.KUMAR, J. 1. This appeal under Section 260 A of the Income Tax Act, 1961 (for brevity 'the Act') is directed against order dated 14.2.2000 rendered by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh (for brevity 'the Tribunal') in ITA No. 2176/ Chandi/ 1992 in respect of the assessment year 1989-90. The Revenue has claimed that following substantive questions of law would emerge for determination of this Court: 1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in allowing payment of Rs. 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter close analysis of the evidence collected by the department and adduced by the assessee concerning services rendered by M/s Blue Chip Company it was held that there was no material on record to show that any services were rendered by M/s Blue Chip and Company. It was also found that there was no evidence placed on record by the assessee to show that its sales were promoted by the appointment of the handling agent M/s Blue Chip and Company. From the various transactions between the Blue Chip Company, Chairman and M.D. of United Breweries and others it was found that substantial part of the payment has been made to the Blue Chip Company from the assessee- company as interest free loan to Shri Vijay Mallya and Smt. Samira Mallya. Agreement between the assessee company and M/s Blue Chip Company which forms the basis of C F handling charges was found to be a sham transaction and a devise to reduce the assessee- company's taxable income as well as to create capital in the hands of Birinder Pal Singh, Proprietor of Blue Chip and Company and interest free liquidity in the hands of M/s United Breweries and Shri Vijay Mallya and his wife Smt. Samira Mallya. After the agreement, M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT 1992 (193) ITR 321 and Berger Paints India Ltd. v. CIT (2004) 266 ITR 99 (SC) would ordinarily create a bar if the revenue has not preferred an appeal on a question of law which had arisen earlier by accepting the order. The aforesaid principle, however, is not absolute. In the case of C.K.Gangadharan and another v. CIT (2008) 304 ITR 61, after accepting the earlier views of Hon'ble the Supreme Court rendered in the cases of Radha Soami Santsang (supra) and Berger Paints (supra), a 3 Judge Bench of Hon'ble the Supreme Court proceeded to hold that if the revenue has not preferred an appeal in one case it would not operate as a bar for the department to prefer an appeal in another case where there is a just cause for doing so or particularly if it is in public interest to do so or for a pronouncement by the higher court when divergent views are expressed by the Tribunals or the High Courts. Therefore, in the instant appeal we are not inclined to accept the view taken by the Tribunal which has decided the issue merely on the ground that in respect of assessment years 1987-88 and 1988-89 the Tribunal has accepted the claim of the assessee- respondent. It would not be in public inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use. The assessee has not put forward any evidence to show that the vehicle was used for the purposes of the company. In these circumstances, the expenses relating to its maintenance are being disallowed. This would result in disallowance of Rs. 11,982/-. 10. On further appeal the CIT(A) has confirmed the view taken by the A.O. Before us the ld. counsel reiterated the arguments advanced before the tax authorities but as was the position earlier no facts were placed on record to show that the car had been used for business purposes and the expenditure claimed thereto was incidental. The reliance on Tribunal decisions reported in 10 ITD 788 and 123 TTJ 54 are without merit. In this view of the matter the disallowance is confirmed. 11. The last ground in the appeal pertaining to levy of interest u/s 234 B is consequential as per assessee's counsel and he has prayed for necessary relief to be allowed on the part of the AO while giving appeal effect to the order of the Tribunal. The ld. DR did not oppose this request and we, therefore, direct the AO to allow consequential relief. 12. In the Revenue's appeal the following two grounds are raised: 1. The Ld. CIT(A)(C) Ludhiana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under in para 9.6 which reads thus: 9.6. Actually these expenses are those expenses which are not allowable under the I.T. Act e.g. entertainment, Indian Foreign Traveling, refreshment expenses, holiday play; giveaway (nature not known) and are clearly disallowable under the I.T. Act. Most of these expenditure is either perquisite or of executives Directors Chairman debited under various heads and not allowable. The facts of the case are similar to the last year where it was held that expenditure is clearly of disallowable nature and not wholly and exclusively for business where it is disallowed on the following grounds: i) Firstly, what the assessee means is expenditure in CMD is first incurred and then on the basis of man-hours spent on various companies it is distributed among the group of companies of U.B. Ltd. group; that means expenditure which is incurred need not be wholly and exclusively for business purposes or allowable expenditure and this is supported by details of expenditure that expenditure is neither wholly of exclusively for the business of the assessee company nor it is allowable u/s. 37 of the I.T. Act. ii) Secondly, the assessee or CMD has not g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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