Case Note & Summary
The respondent-assessee, a clearing and forwarding agent at New Mangalore Port Trust (NMPT), declared total income of Rs.1,11,03,920/- for the assessment year 2006-07. The Assessing Officer disallowed 30% of the speed money paid by the assessee, adding Rs.67,59,784/- to the income, on the ground that the expenditure was bogus. The assessee appealed to the Commissioner of Income Tax (Appeals), Mangalore, who allowed the appeal on 21.10.2009. The Revenue then appealed to the Income Tax Appellate Tribunal (ITAT), which dismissed the appeal on 30.07.2010. Aggrieved, the Revenue filed the present appeal under Section 260-A of the Income Tax Act, 1961 before the High Court of Karnataka. The High Court heard both sides and perused the record. The court noted that the CIT(A) and ITAT had concurrently found that the expenditure was genuine and that the disallowance was not justified. The Revenue failed to demonstrate any perversity or error of law in the findings. The court held that no substantial question of law arose and dismissed the appeal.
Headnote
A) Income Tax - Speed Money - Disallowance - Section 260-A, Income Tax Act, 1961 - The Revenue challenged the deletion of addition of 30% of speed money paid by the assessee, a clearing and forwarding agent, to NMPT employees. The Assessing Officer disallowed the expenditure as bogus, but CIT(A) and ITAT deleted the addition. The High Court held that no substantial question of law arose as the findings were based on facts and no perversity was shown. (Paras 1-4)
Issue of Consideration
Whether the Tribunal was correct in deleting the addition of 30% of speed money made by the Assessing Officer on the ground that the expenditure was not proved to be bogus.
Final Decision
Appeal dismissed. No substantial question of law arises.
Law Points
- Speed money
- bogus expenditure
- disallowance
- Section 260-A
- Income Tax Act
- 1961
- substantial question of law
Case Details
2015 LawText (KAR) (02) 11
Justice Vineet Saran, Justice S. Sujatha
Sri E.I. Sanmathi (for appellants), Sri S. Parthasarathi (for respondent)
Commissioner of Income Tax, Mangalore and Assistant Commissioner of Income Tax, Circle-1(1), Mangalore
Sri Clifford D'Souza, Prop. Export Trademark Agencies, Mangalore
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Nature of Litigation
Appeal under Section 260-A of the Income Tax Act, 1961 against order of ITAT dismissing Revenue's appeal.
Remedy Sought
Revenue sought to set aside the order of ITAT and restore the addition of 30% of speed money.
Filing Reason
Revenue aggrieved by deletion of addition of 30% of speed money by CIT(A) and ITAT.
Previous Decisions
Assessing Officer disallowed 30% of speed money and added Rs.67,59,784/- to income. CIT(A) allowed assessee's appeal. ITAT dismissed Revenue's appeal.
Issues
Whether the Tribunal was correct in deleting the addition of 30% of speed money made by the Assessing Officer on the ground that the expenditure was not proved to be bogus.
Submissions/Arguments
Revenue argued that the expenditure was bogus and disallowance was justified.
Assessee contended that the expenditure was genuine and findings of fact by CIT(A) and ITAT were correct.
Ratio Decidendi
The findings of fact by the CIT(A) and ITAT that the speed money expenditure was genuine and not bogus are concurrent and not perverse. No substantial question of law arises under Section 260-A of the Income Tax Act, 1961.
Judgment Excerpts
The submission of the learned counsel for the appellants is that the expenditure was bogus and the disallowance was justified.
We do not find any perversity in the findings recorded by the CIT(A) and the Tribunal.
Procedural History
Assessment order dated 28.11.2008 by Assessing Officer disallowing 30% of speed money. Appeal to CIT(A) allowed on 21.10.2009. Revenue appealed to ITAT, dismissed on 30.07.2010. Revenue filed appeal under Section 260-A before High Court on 24.02.2015.
Acts & Sections
- Income Tax Act, 1961: 260-A
