COMMISSIONER OF INCOME TAX Vs. MAX INDIA LIMITED

JUDGEMENT

(1.) This order shall dispose of ITA Nos. 193 and 195 of 2013 as according to the learned counsel for the appellant-revenue, the issues involved in both the appeals are identical. However, the facts are being extracted from ITA No. 193 of 2013.

(2.) Ita No. 193 of 2013 has been preferred by the appellantrevenue under Section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 08.03.2013, Annexure A.3, passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amristar (in short, "the Tribunal") in ITA No. 154 (ASR) 2011, for the assessment year 2005-06, claiming following substantial question of law.

(3.) A few facts relevant for the decision of the controversy involved as narrated in ITA No. 193 of 2013 may be noticed. The assessee company is engaged in the business of manufacturing and sale of bulk drugs, films based on polymers of propylene, leather finishing foils as also treasury operations, services to joint ventures/associates company. It is also marketing a range of BOPP Films, a versatile flexible packaging materials etc having multi business and located setup. Return declaring NIL income was filed on 28.10.2005 by the assessee company which was processed accordingly. Later the case was taken up for scrutiny. Notices under Sections 143(2)/142(1) of the Act alongwith detailed questionnaire were issued and served upon the assessee. Assessment was completed under Section 143(3) of the Act on 28.12.2007 at Nil income after setting off brought forward losses. The Assessing Officer while making assessment made disallowance of expenses on account of non compete fee payment. The Assessing Officer disallowed the claim of expenses of Rs. 84,35,140/- which was made by the assessee on account of non compete fee. These expenses were stated to be paid to an ex-employee restraining him for doing particular business/work/job etc for a particular period being inadmissible in law. Aggrieved by the order, the assessee company filed an appeal before the Commissioner of Income Tax (Appeals), [CIT(A)]. Vide order dated 12.01.2011, Annexure A.2, the CIT(A) allowed the appeal filed by the assessee and deleted the addition/disallowance made by Assessing Officer. Not satisfied with the order, the revenue filed appeal before the Tribunal. Vide order dated 08.02013, the Tribunal dismissed the appeal filed by the revenue. Hence the instant appeals by the appellant-revenue.