Asst. Director of Income Tax (Intl. Taxn)-II, Hyderabad V. M/s. TMGE Automation Systems International LLC, Hyderabad

CO 77/HYD/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7465 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 25-06-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 09-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B V PRASAD REDDY
• Keywords: Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER. ITA NO. 1973/HYD/2011 (ASSESSMENT YEAR 2008-09) ASSTT. DIRECTOR OF INCOME- TAX, INT. TXN. II, HYDERABAD . V/S M/S TMGE AUTOMATION SYSTEMS INTERNATIONAL LLC INDIA, BRANCH OFFICE, HYDERABAD. (PAN AADCT0143K) (APPELLANT) (RESPONDENT) AND C.O. NO. 77/HYD/12 (IN ITA NO. 1973/HYD/2011 ASSESSMENT YEAR 2008-09) M/S TMGE AUTOMATION SYSTEMS INTERNATIONAL LLC INDIA, BRANCH OFFICE, HYDERABAD. (PAN AADCT0143K) V/S ASSTT. DIRECTOR OF INCOME-TAX, INT. TXN. II, HYDERABAD . (CROSS OBJECTOR) (RESPONDENT) REVENUE BY : SHRI B.V. PRASAD REDDY ASSESSEE BY : SHRI M.U. RAMACHANDRAN/ SHRI NITIN KUMAR SARAF DATE OF HEARING 25/06 /2012 DATE OF PRONOUNCEMENT 25/ 06/2012 O R D E R PER CHANDRA POOJARI, A.M., THIS APPEAL BY THE REVENUE AND THE C.O. BY THE AS SESSEE ARE DIRECTED AGAINST THE ORDER OF THE CIT(A)-V, HYD ERABAD DATED 16/09/2011 FOR THE ASSESSMENT YEAR 2008-09. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE CLAIMED TRAVELLING AND CONVEYANCE EXPENSES OF RS. 38,01,341 /-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS STATED THAT OUT OF THE ABOVE EXPENSES, THE FOREIGN TRAVEL EXPENSES OF RS. 23,35,71`9/- HAD BEEN INCURRED TO SEND THE EMPLOYEE S OF THE ITA NO. 1973/HYD/11 & C.O. 77/HYD/1 2 TMGE AUTOMATION SYSTEMS INTERNATIONAL LTD. 2 COMPANY TO THE HEAD OFFICE FOR TRAINING PURPOSES. T HE AO NOTED THAT THE TRAINING HAD NOT BEEN GIVEN TO ALL THE EMP LOYEES AND THE ASSESSEE HAD NOT FURNISHED THE COMPLETE SUPPORTING EVIDENCE OF AIR TICKETS, TOTAL BILLS AND VOUCHES FOR THE MISCEL LANEOUS EXPENSES FOR THE EXPENDITURE CLAIMED. THE AO HELD THAT THE E XACT AMOUNT OF DISALLOWANCE COULD NOT BE WORKED OUT IN THE ABSE NCE OF THE COMPLETE DETAILS AND, THEREFORE, HE DISALLOWED 50% OF THE TRAVELLING EXPENSES CLAIMED TREATING THE SAME AS IT IS NOT INCURRED FOR THE PURPOSE OF BUSINESS. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFOR E THE CIT(A). 3. BEFORE THE CIT(A), THE ASSESSEE FILED WRITTEN SU BMISSIONS, WHICH WERE EXTRACTED BY THE CIT(A) IN HIS ORDER AT PAGES 4,5 &6. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CIT(A) HELD AS UNDER:- I HAVE CONSIDERED CAREFULLY THE FACTS AND EVIDENCE. I FIND THAT THE APPELLANT HAS GIVEN DETAILS OF ALL THE EXP ENSES INCURRED ON TRAVEL. HOWEVER, WITH REGARD TO CERTAIN TRAVEL EXPENSES, THE APPELLANT COULD NOT EXPLAIN AS TO WHA T WAS THE NATURE OF CUSTOMER CALLS AND POTENTIAL CUSTOMER S CALLS FOR WHICH ITS EMPLOYEES TRAVELLED TO RAIPUR, RAIGAD , ETC. BASED ON THE ABOVE FACTS, IT IS CLEAR THAT SOME ELE MENT OF TRAVEL EXPENDITURE IS NOT FULLY PROVEN WHEREAS THE MAJOR PORTION IS EVIDENCED WITH THE DETAILS AND SUPPORTIN G VOUCHERS. THEREFORE, THE DISALLOWANCE IS RESTRICTED TO 20% AS AGAINST 50% MADE BY THE AO. THE APPELLANT GETS R ELIEF ACCORDINGLY. 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E IS IN APPEAL BEFORE US FOR RESTRICTING THE DISALLOWANCE T O 20% ON ACCOUNT OF TRAVELLING ALLOWANCES AS AGAINST THE 50% DISALLOWED BY THE AO WHEREAS THE ASSESSEE FILED ITS CROSS OBJECTI ONS FOR SUSTAINING 20% OF DISALLOWANCE BY THE CIT(A) ON ACC OUNT OF THE SAID TRAVELLING ALLOWANCES. ITA NO. 1973/HYD/11 & C.O. 77/HYD/1 2 TMGE AUTOMATION SYSTEMS INTERNATIONAL LTD. 3 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORD AS WELL AS GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE AO DISALLOWED 50% OF ASSESSEES CLAIM OF TRAVELLING A ND CONVEYANCE EXPENSES OF RS. 38,01,341/- ON THE GROUND THAT THE ASSESSEE FAILED TO FURNISH THE COMPLETE PARTICULARS OF EXPEN DITURE, NAMELY, THE PURPOSE OF VISIT, SUPPORTING EVIDENCE OF AIR TI CKETS, TOTAL BILLS AND VOUCHERS FOR THE MISCELLANEOUS EXPENSES, ETC., TO SUBSTANTIATE ITS CLAIM. ON THE CONTRARY, THE CIT( A) WITHOUT ANY BASIS RESTRICTED THE DISALLOWANCE TO 20% FROM 50% M ADE BY THE AO. IN VIEW OF THE CONTRARY FINDINGS OF THE AO AS W ELL AS CIT(A), WE SET ASIDE THE ORDER OF THE CIT(A) AND REMIT THE ISSUE BACK TO THE FILE OF THE AO WITH A DIRECTION TO RE-DECIDE TH E ISSUE BY MAKING A SPECIFIC DISALLOWANCE FOR THE DISCREPANCIE S MENTIONED IN HIS ORDER AT PAGE 2 THAT NON-FURNISHING OF AIR TICK ETS, TOTAL BILLS AND VOUCHERS ETC, BY THE ASSESSEE TO SUBSTANTIATE I TS CLAIM, AND IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE O PPORTUNITY OF HEARING TO THE ASSESSEE. 6. SINCE THE ISSUE IN DISPUTE IS RESTORED TO THE FI LE OF THE AO TO RE-DO, THE CO FILED BY THE ASSESSEE BECOMES INFRUCT UOUS. 7. IN THE RESULT, APPEAL OF THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES AND THE C.O. FILED BY THE ASSE SSEE IS DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE COURT ON 25/06/2012. SD/- SD/- ( SAKTIJIT DEY ) (CHANDRA POOJARI ) JUDICIAL MEMBER. ACCOUNTANT MEMBER. HYDERABAD, DT. 25 TH JUNE, 2012. KV ITA NO. 1973/HYD/11 & C.O. 77/HYD/1 2 TMGE AUTOMATION SYSTEMS INTERNATIONAL LTD. 4 COPY FORWARDED TO: 1. ASST. DIRECTOR OF INCOME TAX, INTERNATIONAL TAXATION , HYDERABAD. 2. M/S TMGE AUTOMATION SYSTEMS INTERNATIONAL LLC IN DIA BRANCH OFFICE, UNIT NO. 03-04, 3 RD FLOOR, BLOCK-2, CYBER PEAL, HI-TECH CITY, MADHAPUR, HYDERABAD. 3. COMMISSIONER OF INCOME - TAX(APPEALS) - V , HYDERABAD 4. DIT (INTERNATIONAL TAXATION), HYDERABAD. 5. THE D.R., ITAT, HYDERABAD.