2019 (4) TMI 1395

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....ibunal (for short, "the Tribunal"). 3. A few facts need mention here-in-below for the disposal of this appeal, which involves a short point. 4. The appellant is the Commissioner of Income Tax and the respondent is an assessee. 5. The respondent-assessee is a Limited Company, which is engaged in the business of manufacturing of various kinds of papers. The dispute in this appeal relates to the assessment year 199394. 6. The question arose in the assessment year in question before the Assessing Officer (AO) as to what is the true nature of payment of Rs. 3.25 crores made by the respondent-Company ( assessee) to one Mr. G.R.Hada pursuant to the compromise arrived at between the respondent-assessee Company and Mr. G.R.Hada in a civi....

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....ed an appeal to the Commissioner of Income Tax (Appeals)I, Nagpur. The CIT (Appeals) dealt with this issue in Para 15 of his order (pages 92 to 94 of the SLP paper book) and by his order 18.12.1998 confirmed the addition made by the AO. In other words, the CIT (Appeals) was also of the view that the claim made by the respondent-Company ( assessee) cannot be considered as "revenue expenditure". 13. The respondent-Company ( assessee) felt aggrieved and filed second appeal in the Income Tax Appellate Tribunal. The Tribunal examined the question in Paras 26 and 27 and by its order dated 30.06.2003 allowed the appeal and directed the AO to allow the deduction of Rs. 3.25 crores as claimed by the respondent-Company ( assessee). 14. The Comm....

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....ly lead to a conclusion that the CIT(A) was of the view that the expenditure in question was not a capital expenditure but of a revenue nature..........." 20. The aforesaid observation of the Tribunal, on what AO and CIT (Appeals) held, does not seem to be correct and rather inconsistent when we peruse the finding of the AO (concluding Para 12 (a) & (d) of the AO's order at page 60 of SLP and concluding Para 15.1 of CIT (Appeals) at page 93 of the SLP). 21. In other words, we find that the Tribunal did not correctly appreciate as to what AO and CIT (Appeals) held and what was their reasoning which led to their respective conclusion. 22. Having wrongly observed about their respective reasoning and the finding, the Tribunal proceeded....