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TMI Blog2016 (4) TMI 1047X X X X Extracts X X X X X X X X Extracts X X X X ..... the same tax bracket. - Decided against revenue - ITA No. 3644/Del/2012 - - - Dated:- 17-3-2016 - SHRI J.S. REDDY, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Appellant : Shri P. Damkanunja, Sr. DR For The Respondent : S/Shri Pradeep Dinodia, CA, R.K. Kapoor, CA ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER The present appeal has been preferred by the Department against the order passed by the Ld. CIT (A)-IX, New Delhi for assessment year 2008-09. 2. The brief facts of the case are that the assessee is engaged in the business of manufacturing CNG/LPG Kits and other alternative fuel solutions for various OEMs and the replacement market. The company has been supplying LPG Kits to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unded off) Rs.7,94,68,030/- 5. Aggrieved, the assessee preferred an appeal before the First Appellate Authority in which all the three additions were deleted and the appeal of the assessee was allowed. 6. Now, the Department is in appeal before us and has raised the following grounds of appeal:- 1. The order of Learned CIT (A) is erroneous contrary to facts law. 2. On the facts and in the circumstances of the case and in law, the learned CIT (Appeals) has erred in deleting the addition of ₹ 1,81,91,663/- out of royalty payments. 3. On the facts and circumstances of the case and in law, the learned CIT (Appeals) has erred in deleting the addition of ₹ 77,517/- out of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both the companies i.e. MIL and MAGL is Mr. Nirmal K. Minda who is the common Director and has major share holding 22.05 percent. Besides Minda Industries Ltd. has substantial interest in the company. It was further submitted that MUL has long and cordial relation with Minda Industries Ltd., knowing fully well that the Directors are common and it is the same group company with substantial interest of Minda Industries Ltd., there is no reason why MUL would hesitate to procure Gas kits from MAGL. The submission of the assessee is mere fiction and not a fact and therefore the disallowance u/s 40A(2)(a)/(b) was rightly made by the AO. 9. The Ld. AR, in response, placed heavy reliance on the impugned order. 10. We have heard the rival sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat it is for the businessman to decide as to what is required to be done for its business and the AO has only to see as to whether the expenses have been incurred wholly and exclusively for the business or not. The AR cited following judgments for this proposition of law: (i) Chandulal Keshavlal v. CIT 38 ITR 601 (SC). (ii) J.K. Woolen Mills v. CIT 72 ITR 612 (SC). (iii) Panipat Woolen General Mills v. CIT 103 ITR 66 (SC). (iv) Sassoon J. David Co. v. CIT 118 ITR 261(SC). (v) S.A. Builders Ltd. v. CIT 288 ITR 1 (SC). 6.4 As regards applicability of section 40A (2)(b), the AR has submitted that these provisions have been wrongly invoked and the same are not attracted because M/s Minda Industries Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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