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2008 DIGILAW 434 (KAR)

Commissioner of Income Tax v. Valerian Pinto

2008-08-20

A.S.PACHHAPURE, K.L.MANJUNATH

body2008
JUDGMENT K.L. Manjunath, J.— This appeal is by the Revenue challenging the order passed by the Income Tax Appellate Tribunal, Bangalore Bench, in I.T.A. No. 48/Bang/03, dated April 8, 2004. 2. Though several questions are raised by the appellant in the appeal memo during the course of arguments, it is brought to our notice that the question of law framed in the appeal memo required to be retrained. Accordingly, we reframe the question of law as hereunder: (1) Whether the appellant is entitled to deduction towards the expenses stated to have been incurred by the assessee for enabling the police and excise authorities to conduct raid for the benefit of the assessee in view of Explanation to Section 37(1) of the Income Tax Act? 3. We have heard counsel for the parties. 4. It is not in dispute that the assessee was an excise contractor for three taluks. In the returns filed by him, certain expenditure was shown stating that the said amount was spent by the assessee for the purpose of conducting a raid to detect the illegal manufacture and sale of illicit liquor by the unauthorised persons with the help of the Police and Excise Department. In other words, the amount was spent to facilitate the Excise and Police Department to conduct raid. The Assessing Officer disallowed the claim of the assessee on the ground that such expenditure amounts to bribe. The order passed by the Assessing Officer was challenged before the Commission of Income Tax (Appeals) which appeal came to be dismissed. Against which the assessee filed an appeal before the Income Tax Appellate Tribunal, which appeal has been allowed. Against the divergent findings, the present appeal is filed by the Revenue. 5. We have heard counsel for the parties. 6. Learned Counsel for the assessee relying upon the judgment of this Court reported in Commissioner of Income Tax Vs. A. Janardhana Shetty, (2002) 254 ITR 281 KAR contends that the point in issue is no more a res integra and that the question of law raised in this appeal is answered in favour of the assessee by a Division Bench of this Court in the aforesaid case. Therefore, he requests the court to dismiss the appeal. 7. Learned Counsel for the Revenue contends that the facts involved in the aforesaid case and the facts in the present case are entirely different. Therefore, he requests the court to dismiss the appeal. 7. Learned Counsel for the Revenue contends that the facts involved in the aforesaid case and the facts in the present case are entirely different. According to him, in order to show that the expenditure was incurred by the assessee to facilitate the Police and Excise Department to conduct a raid, no document was produced before the Assessing Officer. Taking us through the findings of the Assessing Officer, he contends when no such material was placed before the Assessing Officer to show that it was an expenditure really incurred to conduct the raid and whether so much amount was required for conducting the raid has to be examined, Since such material is not placed before the Assessing Officer, we are of the opinion that an opportunity should be given to the assessee to produce those documents. Thereafter, it is for the Assessing Officer to examine the claim of the assessee in the light of the judgment passed by this Court in Commissioner of Income Tax Vs. A. Janardhana Shetty, (2002) 254 ITR 281 KAR. 8. Therefore, in the circumstances without answering the question of law, we remand the matter to the Assessing Officer to consider the case of the assessee in accordance with law. 9. Accordingly, the appeal is allowed.