M/s Karun Carpets Pvt. Ltd., New Delhi V. DCIT, New Delhi

CO 133/DEL/2016

• Counselvise Citation: [2017] 119 COUNSELVISE.COM (IT) 3465 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 21-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 23-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JASPAL SINGH SAHNI
• Keywords: Scheme of amalgamation; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES B DELHI BEFORE SH. P.K.BANSAL, VICE PRESIDENT AND SH. AMIT SHUKLA, JUDICIAL MEMBER ITA NO.6859/DEL/2015 (ASSESSMENT YEAR: 20 11-12) C.O.NO-133/DEL/2016 (IN ITA NO.6859/DEL/2015) (ASSESSMENT YEAR: 20 11-12) APPELLANT BY SH. ANSHU PRAKASH, SR.DR RESPONDENT BY SH. JASPAL SINGH SAHNI, CA DATE OF HEARING 21.09.2017 DATE OF PRONOUNCEMENT 21.09.2017 ORDER PER P.K.BANSAL, VICE PRESIDENT THIS APPEAL AS WELL AS THE CROSS-OBJECTION HAS BEEN FILED AGAINST THE ORDER OF THE CIT(A)-17, NEW DELHI PERTAINING TO AY 2011-12. THE APPEAL FILED BY THE REVENUE IS CONCERNED, THE TAX EFFECT IS LESS THAN RS.10 LA CS. DCIT, CIRCLE-14(2), ROOM NO.-317B, 3 RD FLOOR, C.R. BUILDING, I.P.ESTATE, NEW DELHI. VS KARUN CARPETS PVT. LTD., 701, 7 TH FLOOR, VIKAS DEEP BUILDING, PLOT NO.18, LAXMI NAGAR, DISTT. CENTRE, LAXMI NAGAR, NEW DELHI-110092. PAN-AAACK2331D (APPELLANT) (RESPONDENT) KARUN CARPETS PVT. LTD., 701, 7 TH FLOOR, VIKAS DEEP BUILDING, PLOT NO.18, LAXMI NAGAR, DISTT. CENTRE, LAXMI NAGAR, NEW DELHI-110092. PAN-AAACK2331D VS DCIT, CIRCLE-14(2), ROOM NO.-317B, 3 RD FLOOR, C.R. BUILDING, I.P.ESTATE, NEW DELHI. (APPELLANT) (RESPONDENT) ITA NO.6859/DEL/2015 & C.O-133/DEL/2016 2 2. WE HAVE HEARD BOTH SIDES AND CAREFULLY CONSIDERE D THE SAME. THE CBDT CIRCULAR NO.21/2015 DATED 10.12.2015 HAS DECIDED TH AT THE APPEAL SHALL NOT BE FILED BEFORE THE APPELLATE TRIBUNAL IN CASES WHERE THE TA X EFFECT DOES NOT EXCEED MANDATORY LIMIT OF RS.10 LACS. THE CIRCULAR WOULD APPLY TO ALL PENDING APPEALS AS WELL. ADMITTEDLY IN THE DEPARTMENT APPEAL, THE TAX EFFECT IS LESS THAN RS.10 LACS. THEREFORE, THE DEPARTMENTAL APPEAL IS NOT MAINTAINA BLE AS WAS FILED IN VIOLATION OF ABOVE CIRCULAR. THEREFORE, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 3. NOW, COMING TO THE CO FILED BY THE ASSESSEE, WE NOTED THAT THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LD.CIT(A) HAS ERRED IN UPHOLDING THE ADDITION MADE BY LD.AO ON ACCOUNT OF TRAVEL EXPENSES OF LAWYERS AMOUNTING TO RS.75,525/-. 2. THE LD.CIT(A) HAS ERRED IN UPHOLDING THE ADDITION M ADE BY LD.AO ON ACCOUNT OF VISA FEE OF SH. KARAN THAPAR AMOUNTING TO RS.8,7 50/-. 4. GROUND NO.1 RELATES TO THE UPHOLDING THE DISALLO WANCE OF RS.75,525/- ON ACCOUNT OF TRAVEL OF THE EXPENSES OF THE LAWYERS. 5. WHILE GROUND NO.2 RELATES TO THE UPHOLDING THE D ISALLOWANCE OF RS.8,750/- INCURRED ON ACCOUNT OF VISA FEE OF MR. KARAN THAPAR . THE FACTS RELATING TO BOTH THE GROUNDS ARE THAT THE AO DURING THE COURSE OF THE AS SESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAS CLAIMED A SUM OF RS.3,157,157/- UN DER THE HEAD TRAVELLING AND CONVEYANCE WHICH INCLUDES RS.75,525/- IN RESPECT O F COST OF TICKETS FROM DEL-MUM- DEL TO RESTRUCTURING MANAGEMENT AND VISA FEE PAID F OR MR. KARAN THAPAR FOR LONDON AMOUNTING TO RS.8,750/-. THE ASSESSEE IS ONE OF TH E PROMOTER COMPANIES OF THE OPERATING COMPANIES UNDER THE CONTROL OF MR. KARAN THAPAR. THE ASSESSEE SUBMITTED THAT A SUM OF RS.75,525/- WHILE REIMBURSE MENT OF THE TRAVELLING EXPENSES OF THE TWO LAWYERS WHICH INCLUDES OF AIR TICKETS OF THOSE LAWYERS WITH REGARD TO THE ITA NO.6859/DEL/2015 & C.O-133/DEL/2016 3 SCHEME OF AMALGAMATION OF THE COMPANY WHICH WAS SUB SEQUENTLY APPROVED BY THE RESPECTIVE HONBLE HIGH COURT AND, THEREFORE, THE E XPENSES INCURRED FOR THE PURPOSE OF THE BUSINESS. THE AO DISALLOWED THE SAME. SIMI LARLY FOR THE SUM OF RS.8,750/-, IT WAS SUBMITTED THAT IT WAS PAID FOR THE VISA FEE FOR MR. KARAN THAPAR FOR LONDON FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE AS THE TOUR WAS FOR PROCUREMENT OF THE MAIZE BUT THE AO DISALLOWED THE SAME. WHEN THE MATER WENT BEFORE THE LD.CIT(A), WE NOTED THAT LD.CIT(A) SUSTAINED THE DI SALLOWANCE. 6. AFTER HEARING RIVAL SUBMISSIONS AND GOING THROUG H THE ORDER OF THE TAX AUTHORITIES BELOW, IN OUR OPINION THE EXPENSES INCU RRED FOR AIR TICKETS OF THE LAWYERS FOR DEL-MUM-DEL FOR RESTRUCTURING THE MANAGEMENT OF THE COMPANY AND THE EXPENDITURE WHICH HAS BEEN WHOLLY AND EXCLUSIVELY I NCURRED FOR THE BUSINESS. WE, THEREFORE, DELETE THE SAID DISALLOWANCE SO FAR AS A SUM OF RS.8,750/- RELATING TO VISA FEE OF MR. KARAN THAPAR IS CONCERNED SINCE THE DISA LLOWANCE OF THE EXPENSES FOR HIRING THE CHARTERED PLANE AMOUNTING TO RS.23,36,98 1/- AND DISALLOWANCE WAS CONFIRMED BY THE LD.CIT(A) AGAINST WHICH THE ASSESS EE WAS NOT COME IN APPEAL. THIS EXPENSE IS RELATING TO THE VISA FEE FOR GOING TO TH E LONDON. WE, THEREFORE, SUSTAIN THE SAID DISALLOWANCE. THUS, GROUND NO.1 TAKEN BY THE A SSESSEE IS ALLOWED WHILE GROUND NO.2 STANDS DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED WHILE CROSS- OBJECTION FILED BY THE ASSESSEE IS PARTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 21 SE PTEMBER, 2017. SD/- SD/- (AMIT SHUKLA) (P.K.BANSAL) JUDICIAL MEMBER VICE PRESIDENT DATE:-21.09.2017 *AMIT KUMAR* ITA NO.6859/DEL/2015 & C.O-133/DEL/2016 4 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT A SSISTANT REGISTRAR ITAT, DELHI