TMI Blog2007 (7) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... e judgment of the court was Delivered by P. D. DINAKARAN, J. - The above tax case appeals are directed against the common order of the Income-tax Appellate Tribunal dated 30.09.2005 in I.T.A. Nos.2119, 2120, 2123, 2124, 2121, 2122, 2126 and 2127/Mds/1998 for the assessment years 1993-94 and 1994-95 respectively. 2. The Revenue is the appellant. The relevant assessment years are 1993-94 and 1994-95. The assessees are in the business of purchase and sale of IMFL products. The assessees had shown as if they had purchased the packing materials biz bottles etc., had given it to M/s. Mcdowell and Company, got the liquor filled and then sold them. For the assessment years 1993-94 and 1994-95, the assessees claimed deduction of the cost to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remain unchallenged and therefore become final, dismissed the appeals. 3. Aggrieved by the same, the Revenue has preferred the above appeals raising the following substantial question of law: "Whether in the facts and circumstances of the case, the Tribunal was right in holding that the assessee had not inflated the cost of the packing materials for the IMFL and allowing the inflated expenditure as a deduction?" 4. It is not in dispute that both the assessees and the Revenue agreed before the Income-tax Appellate Tribunal that the issue involved in these appeals had already been decided against the Revenue and in favour of the assessees by the Tribunal by order dated 18.3.1997 made in I.T.A. No.2189/Mds/1995 and the same also ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in order to entitle a deduction under Section 37 of the Income-tax Act, two conditions must be satisfied viz., (a) the expenditure should have been incurred wholly and exclusively for the purpose of the business and (b) such expenditure shall not be in the nature of a capital expenditure." 8. In our considered opinion, both the conditions are satisfied by the assessees in the instant case. Once such a conclusion is reached in favour of the assessees, we do not see any reason to deny the deduction which should have been followed as a matter of course. 9. That apart, the Tribunal held that the transaction or purchase of packing materials were not proved to be sham or that the price paid was different from those shown in the books ..... X X X X Extracts X X X X X X X X Extracts X X X X
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