- (1.) BY way of this appeal under Section 260A of the Income Tax Act, 1961 [ 'the Act '], the appellant-revenue seeks to question the order dated 05.08.2011 passed by the Income Tax Appellate Tribunal, Jaipur Bench, Jaipur [ 'the ITAT '] allowing the cross-objections filed by the assessee [CO No.60/JP/2011] in the revenue 's appeal [ITA No.331/JP/2011] relating to assessment year 2003-04. In the assessment order dated 28.10.2005 leading to the present appeal, the Assessing Officer [ 'the AO '] processed the return filed by the respondent-assessee, who derives income from manufacture and sale of process control instruments, UPS and telecommunication instruments.
(2.) FOR the purpose of present appeal, suffice it to notice that the AO found a sum of Rs.1,05,87,365/- having been provided for contractual obligation; and with reference to the fact that provision under this head was subject-matter of consideration in the preceding years too and the matter was sub judice before this Court in the appeal filed by the department, the AO proceeded to disallow such a provision and added the amount in question to the income of the assessee. The Commissioner of Income Tax (Appeals), Ajmer [ 'the CIT(A) '] found such an addition justified. The ITAT though noticed that the issue was sub judice before this Court but, found it justified to follow its order in the case of assessee for the earlier year and held that CIT(A) was not justified in confirming disallowance of Rs.1,05,87,365/-. The other aspect related with this appeal with reference to the grounds urged is with regard to the expenses incurred by the assessee for issuing the bonds to the tune of Rs.12,74,949/-. The AO disallowed the claim in regard to this expenditure treating it to be of capital expenditure and added the same to the income of the assessee. The CIT(A) confirmed the action of the AO. The ITAT found the expenditure for raising funds through bonds being allowable as revenue expenditure with reference to the decision of this Court in the case of Commissioner of Income Tax Vs. Secure Meters Ltd.: [2010] 321 ITR 611. Seeking to question the findings of the ITAT in respect of the aspects aforesaid, the revenue has preferred this appeal suggesting the following substantial questions of law:- "1. Whether the Tribunal was legally justified in reversing the findings of the CIT(A) and deleting the disallowance of Rs.1,05,87,365/- provided for contractual obligation in the return which was not allowable being contingent/unascertainable liability? 2.Whether the Tribunal has acted perversely in reversing the findings of the CIT(A) and holding that the expenditure of Rs.12,74,949/- incurred on account of issue of bonds was of revenue nature and not capital expenditure? "
(3.) SO far the suggested question No.1 is concerned, in the totality of circumstances and with reference to the fact that the same issue in relation to the previous year is pending in this court, it appears just and proper to formulate the same for the purpose of consideration of this appeal too. However, so far the suggested question No.2 is concerned, we are clearly of the view that the same does not arise as a substantial question of law for consideration in this appeal. This Court in the case of Secure Meters Ltd (supra) with reference to the decision of the Hon'ble Supreme Court in the case of India Cements Ltd. Vs. CIT [1966] 60 ITR 52 has held,-;