NARESH KUMAR VS GOVERNMENT OF INDIA, 1998 PTD-PUNJAB-AND-HARYANA-HIGH-COURT-INDIA 3234 (1996)

Income-tax---

----Reference---Business expenditure---Expenditure on commission and specimen account---Tribunal finding entire amount reasonable---Finding of fact---No question of law arises---Indian Income Tax Act, 1961, S.256(2).

The assessee was a publisher and seller of books and guides. It debited certain amounts under 'commission account' and 'specimen account' a part of which was disallowed by the Assessing Officer on the ground that no vouchers were available in support of the payments. The Tribunal on a consideration of the evidence took the view that the expenditure claimed was reasonable and allowed the expenses claimed by the assessee. On a reference application under section 256(2) of the Income Tax Act, 1961:

Held, that when the factum of the expenditure having been incurred by the assessee had not been disputed by the departmental authorities and the only dispute was with regard to the quantum of deductions, the finding of the Tribunal that the entire amount was reasonable was a pure finding of fact and no referable question of law arose.

R.P. Sawhney, Senior Advocate and Sanjay Goel for the Commissioner.

N.K. Sood for the Assessee.

JUDGMENT

N. K. SODHI, J.---This order will dispose of twelve Income-tax Cases Nos. 175 to 179 of 1993, 37, 38, 84, 96, 179, 181 and 182 of 1994 in which common questions of law and fact arise. Since arguments were addressed in Income-tax Case No. 176 of 1993, the facts are being taken from this case.

These petitions have been filed by the Revenue under section 256(2) of .the Income Tax Act, 1961, for a direction to the Income-tax Appellate Tribunal for referring the following questions of law to this Court for its opinion:

"(i) Whether, on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal is right in law in deleting the additions made by the Assessing Officer and enhancement made by the Commissioner of Income-tax (Appeals) under the heads 'Commission account' and 'Specimen account', in view of the fact that the assessee's claim of expenditure under these heads, is unvouched and not supported by the evidence?

(ii) Whether, on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal is right in law in holding that the first appellate authority is not justified in initiating the proceedings under section 271(l)(c) of the Income Tax Act in view of the fact that the assessee furnished inaccurate particulars of his income making claim under the heads 'Commission account' and 'Specimen account' which is not supported by the evidence?"

The assessee is a publisher and seller of books/guides. The Departmental authorities made some additions out of the amounts which the assessee had debited in its books under the heads "Commission account" and" Specimen account" on the ground that the expenses as claimed were not supported by any documentary evidence in the form of vouchers. The second appeal filed by the assessee was allowed by the Income-tax Appellate Tribunal and the additions made by the Assessing Officer were deleted. The Tribunal observed that it was not the case of the Revenue that no commission had been paid or that no specimen copy had been distributed. It may be mentioned that the Assessing Officer while making the additions had allowed a part of the deductions as claimed by the assessee holding that the balance amount was highly excessive though the entire amount claimed was not supported by any voucher or other documentary evidence. While allowing the appeal of the assessee, the Tribunal on a consideration of the evidence took the view that the expenditure claimed by the assessee was reasonable under both the heads, i.e., "Commission account" and "Specimen account". In other words, .the factum of expenditure having been incurred by the assessee had not been disputed by the Departmental authorities and the only dispute was with regard to the quantum of deductions claimed and allowed. The Assessing Officer as well as the Commissioner of Income-tax (Appeals) accepted the position that the expenditure even though not vouched and supported by any evidence had to be allowed within reasonable limits. As already observed, the Tribunal in appeal found that the entire amount claimed by the assessee was reasonable. This finding of the Tribunal is a pure finding of fact. We are thus of the considered opinion that not referable question of law arises.

In the result, the petitions are dismissed.

M.B.A./1580/FC????????????????????????????????????????????????????????????? ?Petitions dismissed.