M/S. HOTEL & ALLIED TRADERS PVT. LTD. V. DEPUTY COMMISSIONER OF INCOME TAX

ITA/221/2013

AI Insights

The case involves M/s. Hotel & Allied Traders Pvt. Ltd., the appellant, challenging the order of the Income Tax Appellate Tribunal (ITAT), Cochin Bench, which sustained certain disallowances made by the Assessing Officer under various sections of the Income Tax Act for the assessment year 2007-08. The main issues pertained to the disallowance of a deduction under Section 40A(2b), the deduction made under Section 40(a)(1a), the non-allowance of deduction under Section 80G, and the denial of depreciation relatable to a subsidy amount of Rs.75 lakhs. The Tribunal had remitted some issues back to the Assessing Officer for fresh consideration, and the High Court clarified that the Assessing Officer should reconsider these matters without being influenced by the Tribunal's observations.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 699244 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 12-11-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: JOSEPH MARKOSE; V MARKOS; BINU MATHEW; TOM THOMAS; ABRAHAM MARKOS
• Keywords: Assessment Year 2007-08; Disallowance of deduction; Income tax appeal; Depreciation Relatable to Subsidy
• Section: 80G; 40A(2b); 40(a)(1a)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN WEDNESDAY, THE 12TH DAY OF NOVEMBER 2014/21ST KARTHIKA, 1936 ITA.No. 221 of 2013 () ----------------------- AGAINST THE ORDER IN ITA 678/COCH/2010 of I.T.A.TRIBUNAL, COCHIN BENCH DATED 25-10-2012 APPELLANT(S)/APPELLANT/APPELLANT/ASSESSEE: -------------------------------------------- M/S. HOTEL & ALLIED TRADERS PVT. LTD. C/O.CASINO HOTEL, W/ISLAND, COCHIN-3. BY ADVS.SRI.JOSEPH MARKOSE (SR.) SRI.V.ABRAHAM MARKOS SRI.BINU MATHEW SRI.TOM THOMAS (KAKKUZHIYIL) SRI.ABRAHAM JOSEPH MARKOS RESPONDENT(S)/RESPONDENT/RESPONDENT/DEPARTMENT: ------------------------------------------------------------------------ DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-I, ERNAKULAM. R BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 12-11-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX IN ITA.221/13 APPELLANT'S EXHIBITS: ANNEXURE A: A TRUE COPY OF THE ASSESSMENT ORDER DATED 26.11.2009. ANNEXURE B: A TRUE COPY OF THE ORDER PASSED IN THE APPEAL DATED 15.9.2010 OF THE COMMISSIONER OF INCOME TAX (APPEALS) -11 ANNEXURE C: A TRUE COPY OF THE ORDER DATED 26.10.2012 PASSED BY THE ITAT IN ITA NO.678/COCH/2010/ /TRUE COPY/ PS TO JUDGE ANTONY DOMINIC & ANIL K.NARENDRAN, JJ. ----------------------------------- I.T.A.No.221 of 2013 ----------------------------------- Dated this the 12th day of November, 2014 JUDGMENT Antony Dominic, J. 1. This appeal is filed by the assessee challenging the order passed by the Income Tax Appellate Tribunal in ITA.No.678/Coch/2010 for the assessment year 2007-08. The following are the four questions of law raised in the appeal: “(a) Whether on the facts and circumstances of the case the Tribunal is justified in sustaining the disallowance of deduction made by the Assessing Officer under Section 40A (2b) of the Act. (b) Whether in the facts and circumstances of the case the Tribunal is justified in sustaining the deduction made by the Assessing Officer under Section 40(a)(1a) of the Act. (c) Whether in the facts and circumstances of the case the Tribunal is justified in not allowing the deduction under Section 80G of the Income Tax Act. (d) Whether in the facts and circumstances of the case Tribunal is justified in denying the deduction of depreciation relatable to subsidy amount of Rs.75 lakhs.” ITA.221/13 2 2.In so far as the first question is concerned, it is seen from the order of the Tribunal that the Commissioner of Income Tax (Appeals) confirmed the additions made by the Assessing Officer, among others, in relation to disallowance of `5 lakhs under section 40A(2)(a) of the Act out of the payments made to M/s.Kuruvulanakunnel enterprises. After considering the rival contentions, the Tribunal restricted the disallowance to `2.5 lakhs and it is in this context, the first question of law was raised by the assessee in this appeal. 3.The orders passed by the Assessing Officer, the Commissioner and the Tribunal show that the disallowance of `5 lakhs and its restriction to `2.5 lakhs is based on the facts and evidence available and therefore, the findings thereon are findings of fact which do not give rise to any question of law. 4.In so far as the remaining three questions are concerned, order of the Tribunal shows that these issues stand remitted to the Assessing Officer for ITA.221/13 3 fresh consideration. Therefore, these questions do not arise for consideration of this Court at this Stage. However, the order passed by the Tribunal shows that certain observations have been made, which are capable of influencing the Assessing Officer. 5.In the above circumstances, we clarify that the Assessing Officer shall reconsider the matter as directed by the Tribunal untrammelled by the observations contained in the order of the Tribunal. Appeal is disposed of accordingly. Sd/- ANTONY DOMINIC, Judge. Sd/- ANIL K.NARENDRAN, Judge. kkb. "