By C. N. Vaze, Shailesh Kamdar, Jagdish T. Punjabi, Chartered Accountants
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33 (2008) 119 TTJ 433 (Jab.) (TM)
Vindhya Telelink Ltd. v. Jt. CIT
ITA No. 295 (Jab.) of 2000 and
C.O. No. 19 (Jab.) of 2002
A.Ys. : 1997-98 and 1998-99. Dated : 22-8-2008
S. 254(1) of the Income-tax Act, 1961 — If any decision is
not relied upon by the parties at the time of hearing and the Bench desires to
apply the ratio of such decision, natural justice demands that the Bench should
confront the parties with such decision and should give an opportunity to them
so that they can make their submissions with reference to such decision.
For the relevant assessment years, the Assessing Officer
disallowed 50% of the expenditure claimed by the assessee assuming that
expenditure towards foreign travel was attributable to the wife of the managing
director, who accompanied him during such visits. The CIT(A) allowed the relief
following the decision of the Kerala High Court in the case of Appollo Tyres
Ltd. [CIT v. Appollo Tyres Ltd., (1998) 149 CTR 538 (Ker.)/(1999) 237 ITR
706 (Ker.)]. The learned AM upheld the order of the CIT(A) following the same
decision of the Kerala High Court. However, the learned JM reversed the order of
the CIT(A) following various other decisions. It was contended by the assessee’s
learned counsel before the TM that the learned JM has referred to such decisions
which were not relied upon or argued on behalf of the Department.
The Third Member noted as under :
1. If any decision is not relied upon by the parties at the
time of hearing and the Bench desires to apply the ratio of such decision,
natural justice demands that the Bench should confront the parties with such
decision and should give an opportunity to them so that they can make their
submissions with reference to such decision. Admittedly, in this case this has
not been done by the Bench.
2. Therefore, since the decisions were not referred to by
any of the parties at the time of hearing, the learned JM was not justified in
relying upon the same while deciding the issue under consideration.
