TMI Blog2010 (3) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... uently rested on these specific facts. On the other hand the subsequent decision in Sugauli Sugar Works [2008 -TMI - 5715 - SUPREME Court] specifically deals with the issue in hand and would cover the case against the Revenue - unclaimed credit balances unilaterally written back is not taxable - IT Appeal No. 1239 of 2008 - - - Dated:- 25-3-2010 - Mr. Vimal Gupta for the Appellant. Mr. Neeraj Sheth i/b Dave Girish Co. for the Respondent. CORAM: DR. D.Y.CHANDRACHUD J.P. DEVADHAR, JJ. ORAL JUDGMENT (Per DR. D.Y. CHANDRACHUD, J.): 1. The registry is directed to number the appeal. Upon the Notice of Motion for restoration being allowed, the appeal has been taken up for admission by consent and at the request of the learned counsel. The appeal is accordingly called out for hearing. The office objections are waived. 2. In this appeal by the Revenue under Section 260A of the Income Tax Act, 1961 eight questions of law have been formulated, these being as follows: "A. Whether in the facts and circumstances of the case and in law the ITAT was right in upholding deletion of the disallowance / addition of Rs.6,86.186/under Rule 6B r/w sec.37(1), in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Each of the questions as formulated can be taken up for discussion separately. Question G is taken up initially since for the reasons indicated hereafter, the appeal would have to be admitted and allowed only qua that question. Requestion G: 5. During the course of the hearing of the appeal, the attention of the Court has been drawn to the judgment of the Supreme Court in Assistant Commissioner of Income Tax, Vadodara v. Elecon Engineering Co. Ltd.{2010(2) Scale 653} It is common ground between counsel appearing on behalf of the Revenue and counsel appearing on behalf of the assessee that the assessee had paid a sum of Rs.6.89 lacs to the bank as roll over charges for repayment of the principal amount of foreign exchange loans taken for capital investments in its High Tech division. This statement of fact also appears in the original order of assessment dated 30th March, 1994, pertaining to Assessment Year 1991-92. In view of the factual position, the issue would be covered against the assessee by the judgment of the Supreme Court in the case of Elecon Engineering. This position is fairly not disputed on behalf of the assessee. In view of the aforesaid position, the contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s provided to employees including any expenses either in the regular course or at the normal place of work or by way of the terms of employment or otherwise. A seminar which was held at a place outside the office or the factory for the business of the assessee, for demonstrating or imparting training to the employees to acquire skill and expertise for sales promotion was regarded as a seminar held at work. 10. In the present case, the contention of the Revenue was that the entire expenditure that was incurred represented entertainment expenditure and hence had to be disallowed. The Tribunal has restricted the disallowance to 75% of the expenditure incurred by the assessee treating the balance of 25% as a reasonable estimate of what was incurred by the assessee for its own business. As a matter of principle no fault can be found with the order of the Tribunal in view of the fact that Explanation 2 to Section 37 specifically excludes expenditure on food or beverages provided by the assessee to employees inter alia at an office, factory or other place of work. The expenditure incurred by the assessee to the extent of 25% of the overall expenditure in question could legitimately be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited v. CIT {(1966) 62 ITR 34 (Bom)} where the Division Bench has held as follows: ".....The transfer of an entry is a unilateral act of the assessee, who is a debtor to its employees. We fail to see how a debtor, by his own unilateral act, can bring about the cessation or remission of his liability. Remission has to be granted by the creditor. It is not in dispute, and it indeed cannot be disputed, that it is not a case of remission of liability. Similarly, a unilateral act on the part of the debtor cannot bring about a cessation of his liability. The cessation of the liability may occur either by reason of the operation of law, i.e., on the liability becoming unenforceable at law by the creditor and the debtor declaring unequivocally his intention not to honour his liability when payment is demanded by the creditor, or a contract between the parties, or by discharge of the debt the debtor making payment thereof to his creditor. Transfer of an entry is neither an agreement between the parties nor payment of the liability...." The Supreme Court held that the principle that the expiry of the period of limitation prescribed under the Limitation Act would not extinguish the debt b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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