COMMISSIONER OF INCOME TAX Vs. NESTLE INDIA LTD

JUDGEMENT

(1.) The appeal of the assessee against the Order dated 6.10.1997 passed by the Commissioner of Income-tax (Appeals) XIII, New Delhi was dismissed by the Income-tax Appellate Tribunal by a detailed order dated 19.9.2001, the legality and correctness thereof is challenged by the Appellant in the present appeal under Section 260A of the Income-tax Act (hereinafter referred to as the 'Act').

(2.) The necessary facts are that assessee filed the return of income on 29.11.1994 declaring a total income of Rs. 33,75,58,470/-. An order under Section 143 (a) of the Act was passed on 12.1.1995. However, the case was taken up for scrutiny under Section 143(2) of the Act. Notices were issued to the assessee on 2.2.1995 in response to which the representative of the assessee appeared. The Assessing Officer upon scrutiny found that amount of Rs. 2,50,81,308/- could not be permitted to be deducted and they disallowed the deduction of the entire amount in terms of provision of Section 40(a) (i). There was not much dispute with regard to other matters but on this particular aspect the Assessing Officer recorded the following findings:

(3.) This order of the Assessing Officer was challenged by the assessee in appeal before the Commissioner of Income-tax who vide his order dated 6.10.1997 set aside the order held and directed as under: