- (1.) This is an appeal by the Income Tax Department (the Department) against the order of the Income Tax Appellate Tribunal (the Tribunal) Order dated 15.2.2007 in respect of assessment year 2001 -02 passed under the Income Tax Act, 1961 (the Act).
(2.) We have heard Sri RK Upadhayaya, counsel for the Department and Sri Mohit Kumar, counsel for the assessee. The department has raised the following five substantial questions of law in the appeal. (i) Whether on the facts and in the circumstances of the case, learned Tribunal have erred in law in reducing addition to the extent of 'Waste Bones' only out of the total addition of Rs. 5,40,730/ - under the Trading Account ignoring the facts that the total purchases were made in cash, that the Sellers of meat were not available at the addresses and were not produced before the AO./Ld. CIT(Appeals) for examination and for verification of weight and the rate of sale; (ii) Whether on the facts and in the circumstances of the case, learned Tribunal have erred in law in deleting by holding that the sum of Rs. 4,50,000/ - out of 'Building Repair Expenses were not capital expenditure ignoring the fact that the expenditure related to the capital works during the year and the definition of the word 'Current Repair' under Sec. 31 of the Income Tax Act, 1961; (iii) Whether on facts and in the circumstances of the case, the learned Tribunal have erred in law deleting the disallowance of Rs. 2 lacs out of the' Building repair at Meerut'' ignoring the fact that the Building was on rent from a person specified under Sec. 40(A)(2)(b) and copy of Agreement was not produced to prove that the repair - expenses were to be borne by the Tenant and definition of the word ' Current Repairs' in Sec. 31 of the Income Tax Act, 1961; (iv) Whether on the facts and in the circumstances, the learned Tribunal have erred in law in deleting the addition of Rs. 27,30,718/ -under Sec. 40A(3) of the IT Act, 1961 ignoring the facts and the ratio laid down by the Hon'ble Allahabad High Court in the case of CIT v/s. Pehlaj Rai Daryan Mal : (1991) 190 ITR 242 and Ideal Tannery v/s. CIT : (1979) 117 ITR 34; (v) Whether on the facts and in the circumstances of the case, the learned Tribunal have erred in law in deleting the disallowance of Rs. 1,60,196/ - out of Transport charges ignoring the fact that the Inquiry Letters Under Sec. 133(6) sent to the Transporters at the addresses furnished were either received back ' Unserved' or the replies were not received and the assessee failed to produce the Transporters.
(3.) The Tribunal has decided the first question in favour of the assessee on the basis of the judgment given in the case of sister concern of the assessee in ITA No. 189/BEL/05 dated 26.10.2004 in respect of assessment year 1997 -98. The department had filed ITA No. 18 of 2005 against the aforesaid judgment. It was dismissed on 1.9.2007. For the reasons given in the aforesaid Judgment, the first question has no merits.;