- (1.) The Court : The appeal is directed against a judgment and order dated 11th January, 2008 passed by the learned Income Tax Appellate Tribunal, "D" Bench, Kolkata in ITA No.368 (Kol) of 2006 and ITA No.661 (Kol) of 2006 both pertaining to the assessment year 2002 - 03. The former appeal was an appeal of the assessee and the latter appeal was of the revenue.
(2.) The appeal of the revenue was restricted to deletion of an order disallowing a sum of Rs.1,37,03,258/ - on account of payment of luxury tax. The assessing officer had disallowed the expenditure on the following grounds: - "As the luxury tax demand also included penalty of Rs.6,81,00,001/ - and it is not clear from the challans produced whether the payment is made towards penalty or tax, therefore, it is presumed that the payment is made towards penalty and not tax. Further, the assessee has not produced all the copies of the orders raising the demand. However, from the copies that have been produced it is observed that the demand was raised prior to the commencement of current financial year. For example, the order for the period from 28.05.1994 to 31.03.1995 was dated 30.01.1997. Hence, it cannot be said that the liability was incurred during the current previous year. In view of the above discussion, it is held that the payment made by the assessee is towards the penalty and also the liability has been incurred in the period prior to the commencement of the current previous year. Hence, Rs.5,38,07,429/ - is being disallowed. As the assessee has already disallowed Rs.4,01,04,000/ - in this respect the net disallowance amount to Rs.1,37,03,258/ -."
(3.) In an appeal filed by the assessee against the aforesaid disallowance, the CIT (A) deleted the disallowance which was upheld by the learned Tribunal on the following grounds: - "In our considered opinion, the finding of the A.O. that the amount paid by the assessee might have been on account of penalty is based on no material on record, rather it was based on his presumption. On the other hand, the assessee has furnished evidence and explained the case with its audited books of accounts etc. As per Sec.43B, deduction for liability of any tax is allowable on payment basis. There is no dispute that during the accounting year under consideration, the assessee made payment of Rs.9,95,280/ - + Rs.88,07,978/ -. Another sum of Rs.39,00,000/ - was paid before due date for filing of return. The entire sum, i.e. Rs.1,37,03,258/ - was allowable as per Section 43B. In this view of the matter, we find no reason to interfere with the order of the C.I.T.(A) in deleting the addition made by the A.O. purely on presumption and without any positive evidence on record. The ground of the Revenue, therefore, fails." ;