Commissioner of Income Tax, Kanpur vs JK Iron and Steel Co. Ltd.

In the present appeal filed u/s 260-A of the income tax Act, 1961 against the order dated 17th May, 1999 passed by the income tax Appellate Tribunal, Allahabad, hereinafter referred to as ''the Tribunal'', the Commissioner of income tax, Kanpur has raised the following three questions claimed to be substantial questions of law arising out of the order of the Tribunal: 1. Whether on the facts and in the circumstances of the case the income tax Appellate Tribunal was legally correct in confirming the order of the Commissioner of income tax (Appeals) in directing the Assessing Officer to work out the amount of excess wastage due to the burning loss at the rate of 1.5% against the rate of 2.45% applied by the Assessing Office?

Whether on the facts and in the circumstances of the case the income tax Appellate Tribunal was correct in law in confirming the order of the Commissioner of income tax (Appeals) in deleting the addition of Rs. 25,759/- made by the Assessing Officer on account of disallowance of machinery written off?

Whether on the facts and in the circumstances of the case the income tax Appellate Tribunal is correct in law in confirming the order of the Commissioner of income tax (appeals) in deleting the addition of Rs. 33,520/- made by the Assessing Officer on account of disallowance out of staff welfare expenses?

We have heard Sri Shambhu Chopra, learned Standing Counsel for the Revenue and Sri R.S. Agrawal, learned counsel for the respondent-assessee and have perused the memorandum of appeal and the orders of the previous authorities and the Tribunal.

So far as the first question is concerned, we find that the Tribunal has relied upon its order passed in the earlier assessment year wherein it has upheld the claim of the respondent-assessee regarding wastage allowance. The same is based on the appreciation of ilk-evidence and material on record. The computation of wastage depends upon various factors, which are essentially based on evaluation/appreciation of material on record and is a question of fact. It has not been suggested that the Tribunal has taken into consideration any irrelevant material or factors. Thus the order does not give rise to a question of law much less a substantial question of law as claimed by the Revenue.

So tar as the second question is concerned, the Tribunal has found that the details of the machinery written off has already been brought on record and its scrap value estimated by the Broad of Directors has been debited. Thus, the Tribunal has rightly accepted he claim of deletion of Rs. 25,758/- in respect of machinery. This question also did not raise any question of law.

So far as the third question is concerned, the Tribunal has upheld the finding of the Commissioner of income tax (Appeals) deleting the addition of Rs. 33,520/- towards staff welfare expenses, which were incurred for promoting the employees welfare and to maintain good relations with them. It is also a question of fact and cannot be said to be a substantial question of law. In view of the discussion aforementioned, the appeal fails and is, accordingly, dismissed in limine.