LAWS(GJH)-1999-11-71

COMMISSIONER OF INCOME TAX Vs. EMTICI ENGINEERING LIMITED

Decided On November 24, 1999
COMMISSIONER OF INCOME TAX Appellant
V/S
EMTICI ENGINEERING LTD. Respondents

JUDGEMENT

(1.) THE CIT, Gujarat Central, Ahmedabad, has preferred this application under S. 256(2) of the IT Act, 1961 [hereinafter referred to as the Act] as the application preferred before the Tribunal under s. 256(1) came to be rejected on 11th Sept., 1998.

(2.) THE assessee indicated in his P&L a/c donation aggregating to Rs. 3,50,145 out of which a sum of Rs. 2,50,000 given as donation to Gujarat Cricket Club was the subject matter. 100 per cent deduction was claimed, claiming that the expenditure was in the nature of staff welfare activity. It was pointed out to the AO that the said expenditure was claimed on the ground of commercial expediency in order to facilitate the carrying on business indirectly, by satisfying the needs of executives and staff. The AO held that the benefit of enduring nature has accrued to the assessee company, and, therefore, the same has resulted in acquisition of capital asset. It seems that the CIT(A) hearing the appeal against the order passed by AO was not satisfied with regard to the finding of fact recorded by the AO. CIT(A) had an apprehension in the mind that out of 12 seats, assessee could reserve 6 seats for directors, members of their family or their distinguished guests, and hence directed the AO to verify the claim and allow deduction under S. 80G of the Act.

(3.) THE Tribunal is the final fact finding authority. This Court in required to exercise the jurisdiction if there is a substantial question of law raised by either party. In the instant case, from the assessment order, despite specific case pleaded before the AO, the AO has not recorded any finding of fact in that behalf, that is to say whether the expenditure was in the nature of staff welfare activities or not. Further it appears that the AO concentrated on the aspect that the benefit which has accrued in favour of the assessee is in the nature of enduring nature, and therefore, the expenditure must be considered as capital expenditure as it has ultimately resulted in acquisition of capital asset.