COMMISSIONER OF INCOME TAX Vs. GAUTAM MOTORS

JUDGEMENT

(1.) This appeal has been preferred by the Revenue under Section 260A of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'). The respondent-assessee filed its return for the assessment year 2000-01. The Assessing Officer while making the assessment disallowed various expenditures claimed by the assessee and also made certain additions. The assessee filed an appeal before the Commissioner of Income-tax (Appeals) which was partly allowed. Not fully satisfied with the decision of the CIT(A), the assessee approached the Income-tax Appellate Tribunal. The Department also filed cross-appeal against the order of the CIT(A) challenging the additions which were deleted by the CIT(A). Both these appeals are decided by the Tribunal vide its impugned order dated 29-6-2005. As mentioned above, the Department now feels aggrieved by the order of the ITAT whereby various additions made by the Assessing Officer are deleted by the ITAT. The grievance of the Department is in respect of the following deletions:

(2.) The assessee had claimed deductions on account of purported expenses incurred under the head 'new vehicle and handling charges', to the tune of Rs. 67,90,438.70p. These handling charges included postage and envelope expenses, expenses incurred on petrol and spare parts, handling charges and pre-delivery inspection expenses, warranty expenses and the miscellaneous expenses. The main grievance of the Department relates to the storage charges given by the assessee to its sister concern, M/s. Gautam Auto Ltd. for parking of its auto-rickshaws. The grievance also relates to the claim of petrol expenses.

(3.) Insofar as the storage charges are concerned, the case of the assessee was that it is dealing with auto-rickshaws manufactured by M/s. Bajaj Auto Ltd. As a dealer it was having number of auto rickshaws which require parking space. This parking space was arranged by taking the area from M/s. Gautam Motors (P.) Ltd. (GMPL) at Village Bijwasan.