The Principal Commissioner of Income-tax-2 v. Kunj Infrastructure Pvt. Ltd
[Citation -2020-LL-0921-36]

Citation 2020-LL-0921-36
Appellant Name The Principal Commissioner of Income-tax-2
Respondent Name Kunj Infrastructure Pvt. Ltd.
Court HIGH COURT OF GUJARAT AT AHMEDABAD
Relevant Act Income-tax
Date of Order 21/09/2020
Assessment Year 2010-11
Judgment View Judgment
Keyword Tags initiation of penalty • professional fees • legal expenses • cash payment
Bot Summary: The original assessment under Section 143 of the Act was made determining total loss of Rs.68,02,400/-. Thereafter, the appellant - Revenue in exercise of powers under Section 147 of the Act reopened the same and determined total loss of Rs.63,67,400/- and it disallowed an amount of Rs.4,35,000/- under Section 40A of the Act. The CIT after appreciating the provisions of Section 40(3) of the Act, as amended by Finance Act, 2002 w.e.f. assessment year 2008-09, verified the copy of the bill of the ld. The Tribunal was pleased to partly allow the appeal filed by the respondent assessee on the ground of interest and also on the ground that, no appeal lies against the initiation of penalty under Section 271 of the Act. Considering the findings of the Appellate Authority, CIT was pleased to dismiss the appeal filed by the appellant Revenue. Having considered the concurrent findings, we Page 3 of 4 Downloaded on : Sat Oct 31 10:50:00 IST 2020 C/TAXAP/213/2020 ORDER do not find that, the Tribunal has erred in law and on facts in confirming the decision of CIT deleting the disallowance of Rs.4,35,000/- made under Section 40A(3) of the Act. Questions raised in the appeal are decided against the revenue and in favour of the assessee.


C/TAXAP/213/2020 ORDER IN HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 213 of 2020 PRINCIPAL COMMISSIONER OF INCOME TAX-2 Versus M/S KUNJ INFRASTRUCTURE PVT. LTD. Appearance: MRS MAUNA M BHATT(174) for Appellant(s) No. 1 for Opponent(s) No. 1 CORAM:HONOURABLE MR. JUSTICE R.M.CHHAYA and HONOURABLE MR. JUSTICE ILESH J. VORA Date : 21/09/2020 ORAL ORDER (PER : HONOURABLE MR. JUSTICE R.M.CHHAYA) 1. Heard Mr. Manish Bhatt, learned Senior Counsel assisted by Mrs. Mauna M. Bhatt, learned counsel for Appellant Revenue through Video Conferencing. 2. By this appeal under section 260-a of income tax act, 1961 (hereinafter referred to as act for short), appellant has challenged impugned judgment and order dated 04.12.2019 passed by learned tribunal in ITA No. 2891/AHD/2016 and order passed by CIT(A) Ahmedabad dated 22.08.2016 for assessment year 2010-11. 3. It is case of respondent - assessee, inter alia, that, respondent is engaging in business of construction and it had filed income tax return on 14.10.2010 declaring Page 1 of 4 Downloaded on : Sat Oct 31 10:50:00 IST 2020 C/TAXAP/213/2020 ORDER total income as Nil for Assessment Year 2010-11. original assessment under Section 143 (3) of Act was made determining total loss of Rs.68,02,400/-. Thereafter, appellant - Revenue in exercise of powers under Section 147 of Act reopened same and determined total loss of Rs.63,67,400/- and it disallowed amount of Rs.4,35,000/- under Section 40A (3) of Act. said amount relates to cash payment on account of legal expenses paid to learned Solicitor viz. M/s. C.C.Gandhi & Co., Advocates. 4. Being aggrieved by said order of reassessment, respondent assessee preferred appeal before CIT (A). CIT (A) considered submissions made by respondent assessee and also considered fact that, professional fees paid to said learned Solicitor. CIT (A) after appreciating provisions of Section 40 (A)(3) of Act, as amended by Finance Act, 2002 w.e.f. assessment year 2008-09, verified copy of bill of ld. Solicitor submitted by respondent assessee and considering evidence on record, allowed appeal and disallowance made by assessing officer under Section 40 (A) (3) of Act came to be deleted. However, Tribunal was pleased to partly allow appeal filed by respondent assessee on ground of interest and also on ground that, no appeal lies against initiation of penalty under Section 271 (1) (c) of Act. Page 2 of 4 Downloaded on : Sat Oct 31 10:50:00 IST 2020 C/TAXAP/213/2020 ORDER 5. Being aggrieved by order of CIT(A)2, Revenue preferred appeal before Tribunal. 6. Considering findings of Appellate Authority, CIT (A) was pleased to dismiss appeal filed by appellant Revenue. 7. appellant Revenue has raised following substantial questions of law in this appeal : (i) Whether Appellate Tribunal has erred in law and on facts in confirming decision of CIT (A) deleting disallowance of Rs.4,35,000/- made under Section 40A(3) of Act ? (ii) Whether Appellate Tribunal has erred in law and on facts in holding that payments were covered by Rule 6DD(b) although payments were made by assessee to M/s. C.C.Gandhi & Co. and not to Government ? (iii) Whether Appellate Tribunal has erred in law and on facts by referring to written submission of assessee (reproduced on page 7 of CIT (A) s order), which relies on Rule 6DD(j) although Rule 6DD(j) was deleted w.e.f. 01.12.1995 ? Though above substantial questions of law have been raised in this appeal, all three questions of law relate to payment made in cash to ld. Solicitor by assessee. Having considered concurrent findings, we Page 3 of 4 Downloaded on : Sat Oct 31 10:50:00 IST 2020 C/TAXAP/213/2020 ORDER do not find that, Tribunal has erred in law and on facts in confirming decision of CIT (A) deleting disallowance of Rs.4,35,000/- made under Section 40A(3) of Act. Hence, we find that, both authorities have correctly deleted disallowance made by assessing officer. No interference is called for. Therefore, we are not inclined to admit this appeal. Questions raised in appeal are decided against revenue and in favour of assessee. appeal is hereby dismissed. (R.M.CHHAYA, J) (ILESH J. VORA,J) DRASHTI K. SHUKLA Page 4 of 4 Downloaded on : Sat Oct 31 10:50:00 IST 2020 Principal Commissioner of Income-tax-2 v. Kunj Infrastructure Pvt. Ltd
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