Sh. Sandeep Mittal, Haridwar V. DCIT, Haridwar

ITA 1009/DEL/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3500 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 06-04-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 29-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMRIT KUMAR
• Assessee Lawyers: VIRENDRA PRATAP
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SH. BHAVNESH SAINI, JUDICIAL MEMBER AND SH.L.P.SAHU, ACCOUNTANT MEMBER I.T.A .NO.-1009/DEL/2012 (ASSESSMENT YEAR-2008-09) SANDEEP MITTAL, 15, WEST RAJPUTANA, ROORKEE DISTRICT, HARIDWAR PAN-ADQPM4767R. ( APPELLANT) VS DCIT, CIRCLE, HARIDWAR. (RESPONDENT) ASSESSEE BY SH. VIRENDRA PRATAP, C.A REVENUE BY SH. A M RIT KUMAR, SR.DR DATE OF HEARING 06.04.2017 DATE OF PRONOUNCEMENT 19.04.2017 ORDER PER BHAVNESH SAINI, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED BY TH E LD.CIT(A)-1, DEHRADUN DATED 11.10.2011 FOR A.Y. 2008-09. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. 3. ON GROUND NO.1(A), THE ASSESSEE CHALLENGED THE D ISALLOWANCE OF RS.2,00,000/- OUT OF SALE PROMOTIONS EXPENSES. THE ASSESSEE IS AN INDIVIDUAL, PROPRIETOR OF M/S DEVINE INTERNATIONAL AND IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF BRASS, IRO N AND WOODEN HANDICRAFTS. THE ASSESSEE PRODUCED LEDGER ACCOUNT OF SALE PROMOTION EXPENSES, HOWEVER, VOUCHERS HAVE NOT BEEN PRODUCED. THE ASSESSEE CLAIMED SALES PROMOTION EXPENSES AMOUNTING TO RS.9, 25,579/-. IT WAS PAGE 2 OF 4 FOUND THAT BILLS OF CREDIT CARDS AND OTHER EXPENSES OF PERSONAL NATURE LIKE PURCHASE FROM WOODLAND, RITU WEARS AND PIZZA ETC. A MOUNTING TO RS.5,34,064/- WHICH WERE DEBITED UNDER THE SALE PR OMOTION EXPENSES. THE AO ISSUED SHOW CAUSE NOTICE AS TO WHY THE SALE PROMOTION EXPENSES SHOULD NOT BE DISALLOWED U/S 37 OF THE ACT. THE AS SESSEE SUBMITTED BEFORE THE AO THAT EXPENSES HAVE BEEN MADE FOR THE PURPOSE OF BUSINESS. THE AO, HOWEVER, FOUND THAT THE AMOUNT OF RS.5,34,064/- IS INCURRED FOR PERSONAL PURPOSES AND, THEREFORE, THIS CANNOT BE SA ID THAT SAME HAVE BEEN INCURRED FOR BUSINESS PURPOSES. THE AO DISALLOWED RS.5,34,064/-. THE LD.CIT(A) CONSIDERING THE EXPLANATION OF THE ASSESS EE IN DETAIL NOTED THAT SOME OF THE EXPENSES WERE PERSONAL IN NATURE AND AS SUCH THE ENTIRE EXPENSES CANNOT BE SAID TO BE INCURRED FOR THE PURP OSES OF BUSINESS. THE LD.CIT(A) ACCORDINGLY, SUSTAINED THE DISALLOWANCE I N A SUM OF RS.2 LACS. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE DO N OT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSESSEE. SINCE THE A SSESSEE CLAIMED DEDUCTION OF THE EXPENDITURE, THEREFORE, ONUS IS UP ON THE ASSESSEE TO PROVE THAT EXPENSES HAVE BEEN INCURRED WHOLLY AND EXCLUS IVELY FOR THE PURPOSES OF BUSINESS. THE AUTHORITIES BELOW FOUND THAT THE ASSESSEE INCURRED MANY EXPENSES WHICH ARE PERSONAL IN NATURE LIKE PURCHASE FROM WOODLAND, RITU WEARS AND PIZZA ETC. THE LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE ASSESSEE PURCHASED THESE ITEMS FOR HIS SISTER HOWEV ER, HE WAS NOT ABLE TO EXPLAIN AS TO HOW THE AMOUNT INCURRED ON HIS SISTE R WERE CONNECTED WITH PAGE 3 OF 4 THE BUSINESS ACTIVITY OF THE ASSESSEE. THUS, THE A SSESSEE FAILED TO EXPLAIN THAT THESE EXPENSES WERE INCURRED WHOLLY AND EXCLUS IVELY FOR THE PURPOSE OF BUSINESS. THE LD.CIT(A) WAS JUSTIFIED IN SUSTAI NING THE ADDITION OF RS.2LACS OUT OF SALE PROMOTION EXPENSES. WE MAY AL SO NOTE THAT LD.CIT(A) HAS ALREADY ALLOWED SUFFICIENT BENEFIT TO THE ASSES SEE, THEREFORE, NO FURTHER RELIEF COULD BE GRANTED. THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 5. ON GROUND NO.1(B), THE ASSESSEE CHALLENGED THE A DDITION OF RS.50,000/- OUT OF TRAVELLING AND CONVENIENCE FOR P ERSONAL PURPOSES. THE ASSESSEE CLAIMED EXPENSES OF RS.7,17,315/- ON ACCOU NT OF TRAVELLING AND CONVENIENCE AND RS.2,26,050/- ON ACCOUNT OF TELEPHO NE. THE AO DISALLOWED 30% OF THE EXPENDITURE ON THE GROUND THA T THE ASSESSEE DID NOT PRODUCE THE DETAILS OF HIS EXPENSES IN THE ASSESSM ENT PROCEEDINGS. AS A RESULT, SHE COULD NOT QUANTIFY THE EXACT AMOUNT O F THESE EXPENSES UNDER THESE HEADS WHICH HAD NOT BEEN INCURRED FOR THE PUR POSES OF BUSINESS. THE ASSESSEE DID NOT PRODUCE THE VOUCHERS AND THE P AYMENTS HAVE BEEN MADE MOSTLY THROUGH CREDIT CARDS, THE AO, THEREFORE , DISALLOWED RS.2,83,009/-. THE LD.CIT(A), HOWEVER, CONSIDERING THAT THE ASSESSEE IS IN EXPORT BUSINESS WHICH REQUIRES EXTENSIVE TRAVEL AS WELL AS LONG DISTANCE TELEPHONE CALLS REDUCE THE ADDITION TO RS.50,000/- 6. CONSIDERING THE RIVAL SUBMISSIONS, WE DO NOT FIN D ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSESSEE. THE ASSESSEE DID NOT PRODUCE ANY VOUCHER AND PAYMENT IN THE CASE OF TRAVELLING AND C ONVENIENCE EXPENSES PAGE 4 OF 4 HAVE BEEN MADE MOSTLY THROUGH CREDIT CARDS. PERSON AL ELEMENT IN THIS EXPENDITURE COULD NOT BE RULED OUT. NO SPECIFIC DE TAILS OF EXPENSES HAVE BEEN PRODUCED BEFORE US, THEREFORE, NO INFERENCE IS CALLED FOR IN THE MATTER. THIS GROUND OF APPEAL IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT. SD/- SD/- (L.P.SAHU) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE:- 19 TH APRIL, 2017 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT RE GISTRAR ITAT NEW DELHI