Commissioner of Income-tax-III, Hyderabad v. Seshasayi Foods Pvt. Ltd
[Citation -2014-LL-1029-91]
| Citation | 2014-LL-1029-91 |
|---|---|
| Appellant Name | Commissioner of Income-tax-III, Hyderabad |
| Respondent Name | Seshasayi Foods Pvt. Ltd. |
| Court | HIGH COURT OF HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH |
| Relevant Act | Income-tax |
| Date of Order | 29/10/2014 |
| Assessment Year | 2010-11 |
| Judgment | View Judgment |
| Keyword Tags | sales promotion expenses • sister concern |
| Bot Summary: | 10.2014 Between: Commissioner of Income Tax-III, Hyderabad. Appellant And M/s. Seshasayi Foods Pvt. Ltd., Secunderabad.Respondent THE HON BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. No.645 of 2014 Judgment : This appeal is sought to be preferred and admitted against the judgment and order of the learned Tribunal dated 7.5.2014 in relation to the assessment year 2010-11, on the following suggested questions of law: 1. In the facts and circumstances of the case, whether the Hon ble Income Tax Appellate Tribunal is correct in law in holding that the payment of sales promotion expenses to Bombino Agro Industries Limited, a sister concern on direct sales was allowable as expenditure of the Respondent-assessee 2. In the facts and circumstances of the case, whether the Hon ble Income Tax Appellate Tribunal is correct in law in holding that genuineness of the payment was the only consideration for determining allowability without considering that the expenditure was unreasonable and excessive and not allowable under Section 40A(2) of the Income Tax Act, 1961 and not for wholly and exclusively for the purpose of business as required under Section 37 of the Act We have heard Mr. B. Narasimha Sarma, learned counsel and have gone through the impugned judgment and order of the learned Tribunal. The learned Tribunal found on fact that the assessee has incurred expenditure without any doubt for sale promotion, which was passed on to a company called Bombino Agro Industries Limited. The pre- conditions as permitted by the learned Tribunal under Section 37 of the Income Tax Act have been satisfied. Just because BAIL has earned certain amount of money while undertaking the sale promotion, it does not dis-entitle the assessee to get the benefit under the aforesaid Section as the genuineness of the payment as well as the necessity of incurring expenses are not doubted at all. We do not find any element of law and the appeal is accordingly dismissed. |