2009 (7) TMI 112 - HC - Income Tax

Appeal Aggrieved person appeal by department / revenue deduction was allowed under Section 43B of the Act on account of licence fee paid to the Excise Department. Against the order of the Assessing Officer the Commissioner Income Tax (Appeals) dismissed the appeal and held that the Assessing Officer was justified in treating and declaring income of the assessee from undisclosed sources and also in allowing the deduction under Section 43B of the Act - held that - The Commissioner Income Tax (Appeals) having upheld the order of assessment and not interfered with any liability under the order of assessment the Tribunal was justified in observing that revenue cannot be treated to be aggrieved party.

Summary

Issues:
1. Competency of the revenue to file an appeal.
2. Adjudication of specific grounds by the Income Tax Appellate Tribunal.
3. Treatment of income from undisclosed sources regarding liquor license fee.

Competency of the revenue to file an appeal:
The High Court addressed the issue of whether the revenue could be considered aggrieved by the order of the Commissioner Income Tax (Appeals) and thus competent to file an appeal. The Tribunal had held that since the Commissioner Income Tax (Appeals) upheld the assessment without interfering with any liability, the revenue could not be deemed an aggrieved party. The court agreed with this reasoning, stating that no substantial question of law arose in this regard. Consequently, the appeal was dismissed.

Adjudication of specific grounds by the Income Tax Appellate Tribunal:
The Tribunal was criticized for not adjudicating on the specific grounds raised by the revenue in the appeal. The revenue had submitted that the issue of deduction's admissibility was not addressed by the Commissioner Income Tax (Appeals). However, the Tribunal's decision was based on the fact that the Commissioner Income Tax (Appeals) had upheld the assessment without altering any liability. The court found no merit in the revenue's argument, upholding the Tribunal's decision and concluding that no substantial question of law was raised in this context.

Treatment of income from undisclosed sources regarding liquor license fee:
The case involved the treatment of income from undisclosed sources related to a liquor license fee. The Assessing Officer had considered the license fee liability as income from undisclosed sources. The Commissioner Income Tax (Appeals) supported this treatment and allowed a deduction under Section 43B of the Income Tax Act for the license fee paid to the Excise Department. The revenue appealed to the Tribunal, arguing that the issue of deduction's admissibility was not addressed by the Commissioner Income Tax (Appeals). However, the Tribunal maintained that the revenue was not aggrieved by the Commissioner's decision as no liability was altered. The court upheld this view and dismissed the appeal, stating that no substantial question of law arose from this issue.