9911796707
TMI Blog1994 (5) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... hallenging the merits of the revisional order of the Commissioner. 3. The assessee is a resident company. The assessment year involved is 1984-85 for which the accounting year ended on 30-6-1983. Against a loss of Rs. 74,631 returned by the assessee, the Assessing Officer determined the loss at Rs. 7,52,029. While completing the assessment, the Assessing Officer is said to have not properly enquired into the expenditure of Rs. 1,04,139 on conveyance and commission and brokerage paid at Rs. 6,81,186 on sales promotion. Further, the assessee has paid bonus at the rate of 20% though on account of loss sustained only the minimum bonus of 8.33% was payable under the Payment of Bonus Act under section 36(1)(ii). As these claims were not properly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore, the appeal is decided ex parte on the basis of the record and submissions of the learned D.R. 5. The learned D.R. has vehemently supported the revisional order of the Commissioner of Income-tax both on jurisdiction and on merits of the case. 6. After due consideration of the record and the submissions of the learned D.R., we hold that the Commissioner of Income-tax was not justified in invoking his jurisdiction under section 263 for setting aside the impugned order of assessment made by the Assessing Officer. According to the Bombay High Court in the case of CIT v. Gabriel India Ltd. [1993] 203 ITR 108, two circumstances must exist to enable the Commissioner of Income-tax to exercise the power of revision under section 263, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he circumstances, the order of the Tribunal setting aside the order passed by the Commissioner of Income-tax under section 263 was approved by the High Court. 7. In the instant case, the revisional order of the Commissioner of Income-tax itself clearly shows that the conveyance expenses incurred were spent on engaging public taxis because the staff of the company visited various clients for which taxis were used. There was also a categorical statement by the assessee that no amount has been spent on hiring private taxis. Engaging public local taxis did not amount to expenditure incurred for hiring of motor cars. For this purpose, the Explanatory Memo to the Finance Bill, 1983 was relied upon by the assessee. 8. Coming to the commission pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... again. Therefore, prima facie, the order passed by the Commissioner of Income-tax is not justified because he simply asked the Assessing Officer to re-examine the matter afresh which is not permissible under section 263. Following respectfully, the dictum of the Bombay High Court in the case of Gabriel India Ltd., we hold that the Commissioner of Income-tax was not justified in invoking the jurisdiction and revising the impugned order under section 263 of the Income-tax Act, 1961. 10. Coming to the merits of the case, we find that the expenditure incurred on engaging public taxis (yellow top) is not covered by section 37(3A) as held by the Tribunal Bench 'A', Bombay in the case of Urmila & Co. (P.) Ltd. v. ITO [I.T. Appeal No. 379 (Bom.)/8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s with yellow top, the question of maintenance expenses does not arise and could not have been contemplated by the statute. Therefore, the expenditure incurred on public taxis is not against law and as per clarification of law given above. 11. As regards payment of commission and brokerage, they cannot amount to sales promotion expenses per se. In any case, the Commissioner of Income-tax himself was not sure and left the matter for verification of the terms and conditions of the contract for payment of commission. The Calcutta High Court in the cases of CIT v. Hindusthan Motors Ltd. [1991] 192 ITR 619, CIT v. Bata India Ltd. [1993] 201 ITR 884 and CIT v. Statesman Ltd. [1992] 198 ITR 582 has held that commission and discount paid to the ag ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
