Judgment:
ORDER
SHEET IN THE HIGH COURT AT CALCUTTA Special Jurisdiction [Income Tax].ORIGINAL SIDE ITA No.126 of 2004 J.K.INDUSTRIES LTD.Versus COMMISSIONER OF INCOME TAX,CENTRAL-I BEFORE: The Hon'ble JUSTICE KALYAN JYOTI SENGUPTA The Hon'ble JUSTICE JOYMALYA BAGCHI Date :
6. h March, 2012.
This appeal was taken out against judgement and order of the Learned Tribunal in relation to assessment year 1997-98 and the same was admitted by judgment and order dated 28th February, 2005 on the following substantial question of law: i) Whether the Tribunal was justified in law in disallowing the foreign travel expenditure of the spouses of the appellant’s Managing Directors who accompanied her husband on business visits and its purported findings that the accompaniment of the spouses was not for business expediency/purpose of the business/direct or indirect benefit to the appellant and disallowing the expenditure of Rs.5,18,085/- are arbitrary, unreasonable and perverse?.”.
While hearing Mr.Khaitan and Mr.Mukherjee, it appears to us that we need not take the trouble to decide the matter on elaborate arguments as we notice that on identical facts and circumstances a Division Bench of this Hon’ble Court has decided the identical issue involved herein.
It has been held by the Division Bench in that case [ J.K.Industries LTD.versus Commissioner of Income-Tax, reported in [2011].335 ITR 17.(Cal) ].that the expenditure incurred for tour of the Managing Director together with his spouse authorised by resolution of the Board of the assessee-company is a business expenditure and this expenditure is permissible deduction under the Act.
Mr.Mukherjee contends that he is not sure whether this judgment on which we are placing reliance has been taken to the Supreme Court or not.
To decide this matter this Court cannot wait for the decision of Apex Court.
At present when this judgment has not been upset by the Apex Court, the decision of the Division Bench of this Hon’ble Court binds us as identical fact and issue between the same parties are involved.
The Division Bench has held following the Supreme Court decision on this point, which is as follows: “Applying the aforesaid principle to the facts of our case, we hold that when the board of directors of the assessee had thought it fit to spend on the foreign tour of the accompanying wife of the managing director for commercial expediency, the reasons being reflected in its resolution quoted by us, it was not within the province of the income-tax authority to disallow such expenditure by sitting over the decision of the board, in the absence of specific bar created by the statute for such expenditure.”
Accordingly, following the aforesaid reasoning, we allow this appeal and set aside the judgment and order of the learned Tribunal.
We direct the Assessing Officer to delete the amount, which has been added, disallowing the deduction.
This shall be done as early as possible preferably within a period of one week from the date of production of the copy of this order.
All parties concerned are to act on a signed photocopy of this order on the usual undertakings.
(SENGUPTA, J.) (JOYMALYA BAGCHI, J.) sm AR[CR].