Sahara India Commercial Corporation Ltd Vs ACIT (Delhi High Court)
The Delhi High Court considered an appeal involving, among other issues, whether the Income Tax Appellate Tribunal was justified in restricting the allowance of advertisement expenses incurred by the appellant proportionate to the appellant’s revenue to the total revenue of the Sahara Group on the ground that some indirect benefit may have accrued to other group entities.
During the hearing, the appellant raised an additional substantial question concerning the enhancement of disallowance by the Commissioner of Income Tax (Appeals) [CIT(A)]. The appellant submitted that the Tribunal had affirmed an addition of Rs. 16,74,78,648/- relating to advances given at the Mumbai and Lucknow branches without addressing the appellant’s contention that the enhancement had been made without issuing the statutory notice required under Section 251 of the Income Tax Act, 1961. According to the appellant, although oral and written submissions on this issue were made before the Tribunal, they were neither recorded nor considered.
The Revenue was unable to demonstrate that any notice had been issued before the enhancement. It submitted that the CIT(A) had examined the ledger accounts and records in detail and that the appellant had appeared before the appellate authority, thereby substantially satisfying the requirement of providing an opportunity of hearing.
