|The Tax Publishers2021 TaxPub(DT) 0435 (Karn-HC) : (2021) 431 ITR 0344 : (2021) 279 TAXMAN 0412
INCOME TAX ACT, 1961
Where Tribunal upheld the disallowance under section 37 merely on the basis of order passed in respect of preceding year and also the material was produced by assessee had not been considered by Tribunal while passing its order, such order passed by the Tribunal was cryptic and suffered from vice of non-application of mind and accordingly, the said order was liable to be quashed.
Business expenditure - Allowability - Commission - Material produced by assessee being not considered by Tribunal
AO made disallowance under section 37 of commission payment made by assessee-company, which was upheld by Tribunal. Assessee submitted that Tribunal was justified in upholding the said disallowance as made by the AO, which was only on the basis of the order for the preceding year and such an unspeaking order was sustainable. Further, assessee submitted that it brought to the notice of the Tribunal that for an earlier assessment year, the Tribunal restored the case to AO who on the basis of appreciation of facts and evidence on record accepted the claim and allowed the deduction; however, the Tribunal had not considered such order. Held: It was evident that the material was produced by the assessee, which had not been considered by the Tribunal. It was also noteworthy that the Tribunal had not considered its order passed in respect of an earlier assessment year by which it restored the case back to the file of AO who after appreciation of material on record allowed the claim of the assessee for deduction. However, the Tribunal upheld the disallowance under section 37 merely on the basis of order passed in respect of preceding year. Thus, the order passed by Tribunal was cryptic and suffered from vice of non-application of mind and accordingly, the said order was quashed and the matter was remitted to the Tribunal for decision afresh in accordance with law.
FAVOUR : Matter remanded
A.Y. : 2009-10 & 2010-11
IN THE KARNATAKA HIGH COURT
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