Ajay Kumar Mittal, J. - (1.) This appeal has been preferred by the appellant -assessee under Sec. 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 6.6.2008, Annexure A. 1 passed by the Income tax Appellate Tribunal, Bench I, New Delhi (in short, "the Tribunal"), for the assessment year 1995 -96, claiming following substantial questions of law: - "i) Whether, the Tribunal was justified in confirming the addition on account of claim of interest and sales tax recoverable from IFCI having rightly charged to profit and loss account for the year under appeal in which issue became final by wrongly resorting to the provisions of Sec. 43B of the Income Tax Act, 1961? ii) Whether the Tribunal was justified in confirming 25% disallowance out of business expenditure incurred jointly on the employees and outsiders by treating the same as entertainment expenditure which is against the established principles of law that in those cases where there are mixed expenditure on account of exempted expenditure and other no proportionate disallowance is tenable? iii) Whether the order of the Tribunal is perverse and against the provisions of law -
(2.) A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The assessee filed its return for the assessment year 1995 -96 declaring nil Income on 30.11.1995. Prima facie adjustment/disallowance under Sec. 143(1)(a) of the Act was made by the Assessing Officer in the intimation issued under Sec. 143(1)(a) of the Act on account of interest payable to IFCI amounting to Rs. 22,04,344/ - and sales tax of Rs. 13,88,743/ - against which the assessee filed appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 17.9.1997, the CIT(A) dismissed the appeal. The assessee filed appeal before the Tribunal which was allowed vide order dated 22.5.1998 and prima facie adjustments were deleted on the ground that the issue being debatable could not be disallowed under Sec. 143(1)(a) of the Act. During the pendency of the appeal before the Tribunal, the Assessing Officer passed order under Sec. 144 of the Act dated 16.3.1998, Annexure A. 2 vide which inter alia prima facie adjustments which were disallowed under Sec. 143(1)(a) of the Act, were maintained while framing the regular assessment besides disallowance of entertainment expenses of Rs. 52,257/ - as according to the Assessing Officer, the claim of the assessee was not admissible. Against the said order, the assessee filed appeal before the CIT(A) which was dismissed ex parte vide order dated 11.11.1999, Annexure A. 3. The assessee filed appeal before the Tribunal. Vide order dated 26.5.2003, Annexure A. 4, the Tribunal set aside the ex parte order dated 11.11.1999, Annexure A. 3 and sent the file to the CIT (A) to decide afresh after affording reasonable opportunity to the assessee. Accordingly, the CIT(A) heard the matter on merits and confirmed the disallowance of Rs. 22,04,344/ - and Rs. 13,88,741/ - made by the Assessing Officer on account of interest to IFCI and sales tax by invoking the provisions of Sec. 43B of the Act besides maintaining the addition of Rs. 52,257/ - on account of entertainment expenditure. The assessee filed appeal before the Tribunal. Vide order dated 22.5.1998, Annexure A. 6, the Tribunal upheld the impugned disallowances. Hence the instant appeal by the assessee.
(3.) We have heard learned counsel for the parties.;