MAHARAJ JAI SINGH V. INCOME TAX OFFICER

W.P.(C)/7513/2010

AI Insights

The case involves Rambagh Palace Hotel Pvt. Ltd. and Maharaj Jai Singh, who filed review petitions against the Deputy Commissioner of Income-Tax, New Delhi, challenging the notices issued under Section 148 of the Income Tax Act, 1961. The petitions were based on the claim that the description of Mr. Rajkumar Devraj in the original judgment was incorrect and that the expenses for foreign travel were justified under an agreement with the Taj Group. The court examined these claims and found that the misdescription did not affect the outcome of the case and that the expenses for foreign travel were not supported by sufficient evidence or proper disclosure.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 752147 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 17-04-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: ROHIT MADAN; P R CHOUDHRY; AKASH VAJPAI
• Assessee Lawyers: C S AGGARWAL; PRAKASH KUMAR; SHEEL VARDHAN
• Keywords: Assessment proceedings; Brand promotion; Foreign Travel Expenses; Income Tax; Review petition
• Section: 148

Judgement Text

"Signed By:RAM DATT Signing Date:12.09.2024 11:03 Certify that the digital and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified LN $1 &8to 10 * IN THE HIGH COURT OF DELHI AT NEW DELHI + REVIEW PET. 81/2013 IN W.P.(C) 7206/2012 WITH C.M. APPL. 1700/2013 RAIvIBAGH PALACE HOTEL PVT. LTD. AND ANR. Petitioner Through: Mr. C. S. Aggarwal, Sr. Advocate with Mr. Prakash Kumar and Mr. Sheel Vardhan, Advocates. versus DEPUTY COMMISSIONER OF INCOME-TAX , NEW DELHI Respondent Through: Mr. Rohit Madan, Sr. Standing Counsel with Mr. P. R. Choudhry and Mr. Akash Vajpai, Advocates. U. REVIEW PET. 84/2013 IN W.P.(C) 7023/2010 RAMBAGH PALACE HOTELS PVT. LTD. .....Petitioner Through: Mr. C. S. Aggarwal, Sr. Advocate with Mr. Prakash Kumar and Mr. Sheel Vardhan, Advocates. fl versus DEPUTY COMMISSIONER OF INCOME TAX, NEW DELHI .....Respondent Through: Mr. Rohit Madan, Sr. Standing Counsel with Mr. P. R. Choudhry and Mr. Akash Vajpai, Advocates. + REVIEW PET. 80/2013 IN W.P.(C) 7513/2010 WITH C.M. APPL. 1699/2013 MAHARAJ JAI SINGH .....Petitioner Through: Mr. C. S. Aggarwal, Sr. Advocate with Mr. Prakash Kumar and Mr. Sheel Vardhan, Advocates. ^1 versus INCOME TAX OFFICER . Respondent Through: Mr. Rohit Madan, Sr. Standing Counsel with Mr. P. R. Choudhry and Mr. Akash Vajpai, Advocates. + REVIEW PET. 79/2013 IN W.P.(C) 75 16/2010 WITH C.M. APPL. 1698/2013 MAHARAJ PRITHVIRAJ SINGH Petitioner Through: Mr. C. S. Aggarwal, Sr. Advocate with Mr. Prakash Kumar and Mr. Sheel Vardhan, Advocates. versus INCOME TAX OFFICER Respondent Through: Mr. Rohit Madan, Sr. Standing Counsel with Mr. P. R. Choudhry and Mr. Akash Vajpai, Advocates. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE R.V.EAS WAR ORDER % 17.04.2014 The petitioner seeks review of a common judgment and order dated 10.01.2013 by which notices issued by the respondent under Section 148 of the Income Tax Act, 1961 were upheld and the writ petitions were dismissed. It is contended on behalf of the review petitioner by senior counsel that the reference to Mr. Rajkumar Devraj describing a director of the petitioner-company is without factual foundation. It is urged that the said individual is a complete stranger and had complained to the income tax authorities about alleged evasion. Having regard to these circumstances, it is submitted that though not strictly assumption of fact which has been completely gone into. It was contended - with specific reference to para 10 of the judgment of this Court that the expenses incurred towards brand promotion by foreign travel for relevant years was an aspect which had been examined during the course of regular assessment proceedings. Learned counsel submitted that in accordance with the agreement arrived between the assessee and the Taj Group (Indian Hotels) Ltd. which was originally entered into on 07.03.1975, these expenses had to be incurred and were, therefore, allowed to the assessee, particular reference is made to Section 2 of the said agreement, which is in the following terms: - \"Section 2 - The Operating Company agrees to use its good offices and endeavour to obtain for the hotel and its guests the benefits and advantages of worldwide sales, reservation/ credit card systems available to other hotels managed, operated or owned by the Operating Company or otherwise by virtue of agreement/ arrangement with any group or chain of hotels of international repute. All expenses incurred in respect of the foregoing shall be on account of and at the cost of the Owning Company.\" This Court has considered the submissions as to whether Mr. Rajkumar Devraj was a stranger or a director is not relevant since his description is not central to the issue decided. This Court was not even guided or influenced by the fact that being a director - a reference to such status being made only at one place of the judgment income tax authorities impugned notice was consequently in order. Rather this Court went into merits of the contention that the Section 148 issued in this case were not justified, made by the assessee. Therefore, the argument that the misdescription of Mr. Rajkumar Devraj is without foundation. So far as the second aspect that is the travel expenditure incurred towards foreign trips, this Court merely concluded that there was no supporting material to justify the claim of the assessee nor had the assessee made full and proper disclosure in the returns filed by it. It was in this context the Court stated in para 9 that the \"expenditure on foreign currency for foreign travel amounted to Rs. 12.50 lakhs no other details were filed by the petitioner in respect of foreign travel expenses at the time of original assessment\". Later it was also recorded that \"it is also a fact that the petitioner did not furnish any particulars related to foreign tours and their business connections\". So far as the condition in the agreement of 1975 obliging the assessee or its director to foreign travel goes this is what the Court had to say in \"our attention was not drawn by the ld. Counsel for the petitioner to any particular document or record in which the full and true particulars of the foreign travel expenses were submitted by the petitioner at the time of the original assessment; nor was it disputed that there was D such a clause in the agreement with Ta] group\". As we see Section 2 of the agreement of 07.03.1995 nowhere states that such foreign travel should be undertaken annually or in a routine manner as urged to do. Learned senior counsel argued that understanding of the parties that such trips were mandatory and explanation which had been consistently accepted by the revenue. This Court does not express any opinion on what happened in, the past or as to what was the understanding, which do not in any manner suggests the application which is the reason why the Court clearly recorded in para 10 that no condition or clause in the agreement admitted such a construction. For the above reasons, the Court is satisfied that no ground is made to review the judgment. Review petitions are accordingly dismissed. • Lj S. RAVINDRA BHAT, J R.V.EAS WAR, J APRIL 17, 2014 hs "