The Commissioner of Income Tax-II vs Preetam Singh Luthra

Heard on the question of admission. This appeal u/s 260A of the Income Tax Act, 1961 (for short the Act) is directed against the order dated 16.04.2013 passed by the Income Tax Appellate Tribunal (for short ''the Tribunal'') Bench Indore in ITA No. 203/IND/2012 for the Assessment Year 2006-2007, whereby the Tribunal has affirmed the order dated 24.01.2013 passed by the CIT(A)II, Indore.

Briefly stated, the Assessing Officer (AO) denied to set off the loss on account of forfeiture of licence fee of Rs. 3,93,67,000/- against income, as claimed by the assessee and added the said amount of Rs. 3,93,67,000/- (rupees three crore ninety three lacs sixty seven thousand) as unexplained investment.

In appeal preferred by the assessee, the CIT (Appeals) after examining the record has held, as under:-

Thus in view of the aforesaid discussion the addition made by AO at Rs. 3,93,67,000/- which was actually Rs. 2,32,33,500/- as discussed above, is not found to be sustainable on account of latter confiscation of the amount so deposited, by Collector, Mandsaur and accordingly the entire addition is directed to be deleted.

Dissatisfied with the order of the CIT (Appeals), the Revenue filed appeal before the Tribunal. The Tribunal, after considering the arguments of the learned counsel for the parties, placing reliance on the judgment passed by the Madras High Court in the case of The Commissioner of Income Tax Vs. Chensing Ventures, has held that since the assessee was allotted the licence by the Excise Department, which was later on transfer to one Shankar Lal Patidar but the said licence was cancelled by the Excise Department and the amount of licence fees deposited by the petitioner was forfeited by the Excise Department, the assessee is entitled to set off on account of such forfeiture.

We find no infirmity in the view taken by the Tribunal.

No question of law arises in the matter. In the circumstance, the appeal fails and hereby dismissed.