TMI Blog2008 (3) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... s concerned that would be binding on the Revenue. - Revenue is precluded from raising the issue in the present appeal – Assessee entitled to its claim of special deduction in subsequent years - 177 of 2008 - - - Dated:- 11-3-2008 - F. I. REBELLO and R. S. MOHITE JJ. A. D. Kango and P. S. Sahadeven for the appellant. S. E. Dastur, Jitendra Jain, A. S. Rao, Ricabchand and R. Suvarna, instructed by D. S. K Legal, for the respondent. JUDGMENT The Revenue has approached this court on the following questions: "A. Whether the Tribunal was correct in law in deleting the disallowance of Rs.9,25,02,953 on account of reimbursement of expenses and Rs. 1,17,59,722 being disallowance of deduction under section 80HHE? B. Whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 (P H) which has referred to the principle laid down by the Supreme Court in Berger Paints India Ltd. v. CIT [2004] 266 ITR 99. The Punjab and Haryana High Court and has held that the Revenue is not entitled to raise the issue as no appeal was preferred against the earlier order of the Tribunal and no valid cause had been pleaded for reconsideration of the issue. 4. The Revenue against the order passed by the Assessing Officer and confirmed by the Commissioner of Income-tax (Appeals) preferred two appeals being I.T.A. No.6192/Mum/2004 for the assessment year 1997-98 and I.T.A. No. l785/Mum/2002 for the assessment year 1998-99. The Tribunal first dealt with the Revenue's appeal for the assessment year 1997-98. The Tribunal noted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for provision for various other services. The Assessing Officer held that the expenditure was incurred wholly and exclusively for the purposes of profession of the assessee, but disallowed an expenditure of 20 per cent. The assessee aggrieved by the disallowance preferred an appeal before the Commissioner of Income-tax (Appeals), who deleted the disallowance. The Revenue aggrieved by the order of the Commissioner of Income-tax (Appeals) preferred an appeal to the Tribunal. The Tribunal held that the very concept of token disallowance is bad in law, because such a disallowance is inherently based on surmises and conjectures and devoid of a legally sustainable foundation. It is a case where one accepts all the contentions but not the conseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rger Paints India Ltd. v. CIT [2004 266 ITR 99 came to the conclusion that even respect of an order passed by the Income-tax Appellate Tribunal in respect of the very issue if appeal had not been filed in respect of the previous assessment year it was not open to the Revenue to maintain an appeal for the subsequent years unless valid cause was shown. In Berger Paints India Ltd. [2004] 266 ITR 99 (SC), the Supreme Court considering that the High Courts of Gujarat, this court (Bombay High Court) and the Madras High Court had interpreted the provisions of section 43B and this interpretation has not been challenged by the Revenue following the judgment in the case of Union of India v. Kaurnudini Narayan Dalal [2001] 249 ITR 219 (SC) and other j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g that the Commissioner (Appeals) and the Tribunal set aside the 20 per cent disallowance in respect of the same assessee the Revenue was bound to follow the judgment, having not challenged the order for the assessment year 1997-98 neither has any valid cause being shown for reconsideration. In so far as this issue is concerned the Revenue is precluded from raising the issue in the present appeal. 11. Considering that the new issue was in issue for the assessment year 1997-98 and as the Revenue did not prefer an appeal in respect of the said assessment year in our opinion that part of questions A and B as framed to the extent of disallowance of the sum of Rs.9,25,02,953 would not arise. 12. In so far as questions C and D and part of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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