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| The Tax Publishers2020 TaxPub(DT) 2869 (Mad-HC) INCOME TAX ACT, 1961
Section 37(1)
Where on issue as regards allowability of business expenditure to assessee, factual position needed to be considered, as assessee-company, though incorporated on 17-2-2006, till financial year 2010-11, did not enter into its hotel business, which was main object, for which, assessee company was incorporated, therefore, matter was remanded back to Tribunal for reconsideration afresh.
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Business expenditure - Allowability - Assessee allegedly did not enter into hotel business for relevant assessment year after its incorporation -
Revenue challenged order of Tribunal allowing expenses under section 37, when assessee altered memorandum of association and removed hotel business as one of its main object and same was not applicable to relevant assessment year. Held: Factual position needed to be considered, as assessee company, though incorporated on 17-2-2006, till financial year 2010-11, did not enter into its hotel business, which was main object, for which, assessee company was incorporated. Since order passed by Tribunal did not give any independent reasons for allowing assessee's appeal to follow earlier decision in assessee's own case, which order stood confirmed because appeal filed by revenue before High Court was withdrawn on ground of lower tax effect. Necessarily factual position needed to be adjudicated by Tribunal as it is last fact finding forum in hierarchy of remedies available under the Act. Order was set aside and matter was remanded to Tribunal for a fresh consideration.
REFERRED : Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT (1997) 227 ITR 172 (SC) : 1997 TaxPub(DT) 1304 (SC) K. Sampath Kumar v. CIT (1986) 158 ITR 25 (Mad) : 1986 TaxPub(DT) 0531 (Mad-HC)
FAVOUR : Matter remanded
A.Y. : 2013-14
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