Cit vs Aspentech India Pvt Ltd
2011 Latest Caselaw 5767 Del

*               IN THE HIGH COURT OF DELHI AT NEW DELHI

+                ITA NO.1233/2011

%                         Date of Decision : 28th November, 2011.

CIT                                                    ..... Appellant
                               Through Mr. Abhishek Maratha, sr. standing
                               counsel with Ms. Anshul Sharma, Adv.

                      versus

ASPENTECH INDIA PVT LTD                                ..... Respondent

Through None

CORAM:

HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE R.V. EASWAR

1. Whether Reporters of local papers may be allowed to see the judgment?

2. To be referred to the Reporters or not ?

3. Whether the judgment should be reported in the Digest?

SANJIV KHANNA,J: (ORAL) The present appeal under Section 260A of the Income Tax Act,

1961 has been preferred by the Revenue against order of the tribunal

dated 21.4.2011 in the case of Aspentech India Pvt. Ltd. The appeal

relates to assessment year 2005-06.

2. In the immediately preceding assessment year i.e. 2004-05, the

assessee had claimed expenditure towards commission of Rs.64,89,384/-.

The Assessing Officer disallowed the same relying upon Section 43B of

the Act. In fact, the assessment order for the year 2004-05 dated

31.10.2006 records that the assessee vide order sheet dated 25.10.2006

was required to explain why commission of Rs.61,27,864/- should not be

disallowed as it was not actually paid as required by Section 43B. The

assessee in response vide letter dated 27.10.2006 had stated that the

commission was wrongly claimed on accrual basis and same was offered

for taxation in view of Section 43B of the Act. In view of the said order

this amount of commission, which was disallowed as an expense for the

assessment year 2004-05 was required to be accounted for and allowed as

an expense u/s 43B in the assessment year 2005-06.

3. During the course of assessment proceedings for the assessment

year 2005-06, it was noticed that the respondent-assessee had debited a

Rs.38,14,019/- as commission expense. By another letter dated

24.9.2007, additional expense of Rs.64,89,384/- towards commission was

claimed and a revised computation was filed. The Assessing Officer

rejected and did not consider the additional claim of Rs.64,89,384/- as the

assessee had not filed a revised return. The Assessing Officer relied on

Goetze (India) Limited Vs. Commissioner of Income Tax (2006) 284

ITR 323 (SC). (The amounts viz. Rs.61,27,864/- and Rs.64,89,384/- are

different as it possibly includes after payments made before the date of

filing of the return.)

4. CIT(Appeals) however, after examining the factual matrix, pointed

out that the revised computation including additional claim was filed

because of the requirement of Section 43B. It was further stated that on

the commission paid to the employees up to the date of filing of return of

TDS was also deducted. The CIT (Appeals) examined the said aspect in

detail and considered the vouchers and copy of the bank account of the

respondent-assessee. It was held that the commission expenses of

Rs.84,54,631/- were lawfully allowable as a deduction. The aforesaid

facts were confronted to the Assessing Officer and he was asked to submit

a remand report. The Assessing Officer did not dispute the factual

correctness of the assertion made by the assessee on merits but reiterated

that the respondent-assessee should have filed a revised return as was held

in the assessment order. The CIT(Appeals) allowed the appeal and held

that the additional claim made by the respondent-assessee in the course of

assessment proceedings could have been taken into consideration and

once it is held to be expenses had accrued in the previous year, i.e. 2004-

05, but were allowable in the current year, the deduction should have been

allowed.

5. The ITAT has agreed the reasoning given by the CIT(Appeals) and

has relied upon the decision of this Court in CIT Vs. Jai Parabolic

Springs Ltd. (2008) 306 ITR 42 (Del.). In the said case Delhi High Court

has referred to the powers of the appellate forum and the decisions of the

Supreme Court in National Thermal Power Co. Ltd. Vs. Commissioner

of Income Tax (1998) 229 ITR 383 (SC), Gedore Tools Pvt. Ltd. Vs.

Commissioner of Income Tax (1999) 238 ITR 268, Jute Corporation of

India Ltd. Vs. Commissioner of Income Tax (1991) 187 ITR 688 (SC)

and held that the appellate forum could have entertained and decided the

said aspect. The decision in the case of Goetze (India) Ltd. (supra) is

distinguishable. In the said case the assessee had filed the return of

income for the Assessment Year 1995-96 on 30.11.1995. Thereafter, on

12.01.1998, the assessee wrote a letter to the Assessing Officer and made

a new claim for a deduction, which was rejected by the Assessing Officer

as there is no provision to amend the return. The Supreme Court further

clarified that the issue raised in Goetze (India) Ltd. (supra) was limited to

the power of assessing authority and did not impinge on the power of the

tribunal as was in the case of National Thermal Power Ltd. (supra). In

the present case also the appellate forum had entertained the claim made

by the respondent-assessee and allowed the same. There is no dispute that

the claim/deduction towards the expense is otherwise correct and

allowable.

6. We do not see any reason to entertain the present appeal. The same

is accordingly dismissed.

SANJIV KHANNA,J

R.V.EASWAR, J NOVEMBER 28, 2011 vld