HIGH COURT OF RAJASTHAN
Rajasthan Telematics Ltd.
Assistant Commissioner of Income-tax
IT APPEAL NO. 100 OF 2012
Date of Pronouncement: January 4, 2013
1. Instant income tax appeal has been filed by the assessee U/s 260A of the Income Tax Act,1961 (“Act,1961”) assailing order of the Income Tax Appellate Tribunal dt.04.11.2011 dismissing appeal preferred by the appellant-assessee regarding reassessment being made by the assessing authority on reopening of the proceedings pursuant to notice dt.06.12.2005 U/s 148 of the Act, 1961 for the assessment year 2002-03.
2. From the material which came on record, the return of the assessee was processed for the assessment year 2002-03 U/s 143(1) of the Act on 17.02.2003 accepting the same but when it revealed at a later stage that there was escape of income for the assessment year 2002-03 as contemplated U/s 147 of the Act, 1961, the assessing authority after recording its due satisfaction & assigning reasons served notice U/s 148 of the Act, 1961 dt. 06.12.2005 upon the assessee and after the notice being served obviously asking to submit written objections regarding dis-allowance of expenses referred to in the notice dt. 06.12.2005, opportunity was afforded to the assessee and the assessing authority made reassessment for the assessment year 2002-03 U/s 143(3) of the Act, 1961 vide order dt. 18.12.2006. It will be relevant to record that the primary objection noticed by the assessing authority while serving notice upon the assessee as provided U/s 148 of the Act, 1961 was in regard to dis-allowance of salary of Rs.1,50,000/- to the Managing Director of the assessee company on 30th March, 2002 in cash and Rs.5 Lacs towards advance salary for the assessment year 2002-03 in cash on 10.04.2002 and since it was payment of salary in cash exceeding Rs.20,000/-, the above expenses were dis-allowable as provided U/s 40A(3) of the Act, 1961 and apart from certain other government expenses incurred as alleged for staff training expenses was also disallowed and the reason which was forthcoming from the assessee that expenses have been incurred by the company on improvement of their skill which could be used at later point of time for betterment of the company but the details & vouchers of foreign travel expenses incurred it emerged that person as alleged to be employed was son of the Managing Director who was sent to foreign university for higher studies and it was considered to be non-business expenditure, hence was disallowed & added to the income of the assessee. Against the order of reassessment passed by the assessing authority dt. 18.12.2006 the matter travelled upto Income Tax Appellate Tribunal. However, order came to be passed jointly for the assessment years 2002-03 & 2004-05 but counsel for appellant submits that he is only aggrieved in regard to reopening of the assessment made for the year 2002-03 and has no grievance as regards assessment year 2004-05 of the order of the Tribunal dt.04.11.2011.
3. The learned Tribunal while re-appreciating the factual matrix in detail was of the view that the income declared by the company regarding business expenditure were disallowable U/s 40A(3) of the Act,1961 and the reasonings which was forthcoming from the assessee as regards expenses incurred for expenditure regarding training of staff was not acceptable and such income was considered to be non-business expenses, hence were disallowed & added to the income of the assessee and after examining the factual material came on record the learned Tribunal was of the view that such of the expenses are non-business expenses hence disallowed & affirmed order of the assessing authority regarding adding income of the assessee & dismissed the appeal preferred by the assessee as regards assessment year 2002-03 vide order dt. 04.11.2011.
4. We have heard counsel for appellant at length and also gone through the substantial question of law which he re-framed under the directions of the Court but we are of the considered view that merely question of law is not sufficient and the requirement of statute is that there should be a substantial question of law which requires consideration U/s 260A of the Act and rightly so the legislature is certainly of the view that as regards the factual matrix the matter being examined at various levels upto the Income Tax Appellate Tribunal such factual matrix must be put to rest at some stage and that being so only substantial question of law if emerges certainly is to be considered by this Court.
5. On submission made by counsel for appellant we do not find any substantial question of law at all emerges to be considered by this Court in the instant income tax appeal.
Consequently, the appeal is without substance and accordingly dismissed.