Delhi High Court
The Commissioner Of Income Tax vs Life Long India Ltd. on 1 October, 2010
Author: Manmohan
#14
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ITA 1513/2010
THE COMMISSIONER OF
INCOME TAX ..... Appellant
Through: Mr. Sanjeev Sabharwal, , Advocate
versus
LIFE LONG INDIA LTD. ..... Respondent
Through: None.
% Date of Decision: 01st October, 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
1. The present appeal has been filed under Section 260A of Income
Tax Act, 1961 (for brevity, "Act") challenging the order dated 11th
September, 2009 passed by the Income Tax Appellate Tribunal (in short
"Tribunal") in ITA No. 1610/Del/2009, for the Assessment Year 2005-
2006.
2. The issue that arises for consideration in the present case is
whether the Tribunal was justified in deleting the addition of
`15,08,948/- made by the Assessing Officer (in short, "AO"). The said
amount was paid by the respondent-assessee to Mr. Anil Solanki though
initially for setting up of a company yet was eventually utilized for the
purposes of marketing consultancy. The AO was of the opinion that the
said expenses were not incurred for the purposes of respondent-
assessee's business.
3. However, the Commissioner of Income Tax (Appeals) [in short,
"CIT(A)"] deleted the aforesaid addition on the ground that the
respondent-assessee had produced invoices raised by Mr. Anil Solanki
towards professional services. The CIT(A) also noticed that not only
had such consultancy been utilized but as a consequence of the
consultancy also, the respondent-assessee's export turnover had
increased multifold from ` 13 lacs from the earlier year to ` 259 lacs in
the current year and as ` 1359 lacs for the Assessment Year 2006-2007.
4. The Tribunal vide its impugned order has confirmed the finding
of the CIT(A). The relevant observations of the Tribunal are
reproduced hereinbelow:-
"6. We have duly considered the rival contention of Ld.
DR and perused the material on record. The Ld. CIT(A)
made an observation that AO did not doubt the
genuineness of the payment to Mr. Anil Solanki. In our
opinion, the only area of dispute between the assessee and
the AO is the suspicion of the AO about incurrence of
expenses amount to Rs.15,80,948/- as business expenses.
The sales of the assessee in US market had increased
multifold. The assessee had availed services of Shri Anil
Solanki. Though it was agreed to avail in a different
format but ultimately that format could not work and these
were availed under separate arrangements. Evidence
exhibiting that arrangement was produced not only before
the Ld. CIT(A) but before the AO as observed by the Ld.
CIT(A) on page 2-3 of the impugned order. Therefore,
taking into consideration the finding of the Ld. CIT(A) we
do not see any reason to interfere in it. The appeal of the
revenue is dismissed."
5. From the aforesaid fact, it is apparent that the aforesaid expenses
were justified and were incurred for the benefit of the respondent-
assessee's business. Consequently, the present appeal is dismissed in
limine.
MANMOHAN, J
CHIEF JUSTICE
OCTOBER 01, 2010
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