BEC IMPEX INERNATIONAL P. LTD, MUMBAI V. DCIT CIR 3(1), MUMBAI

ITA 1055/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100759 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 27-08-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 14-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 14A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.2068/MUM/2012 ASSESSMENT YEAR: 2008-09 M/S BEC IMPEX INTERNATIONAL PVT. LTD. C/O- KARNAVAT & COMPANY 24 KITAB MAHAL, 1 ST FLOOR, 192 DR. D.N. ROAD, MUMBAI-400001 / VS. THE DY. CIT, CIRCLE-3(1), 6 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 ( '#$ /ASSESSEE) ( / REVENUE) P.A. NO. AAACB0107C ITA NO.1055/MUM/2014 ASSESSMENT YEAR: 2010-11 M/S BEC IMPEX INTERNATIONAL PVT. LTD. C/O- KARNAVAT & COMPANY 24 KITAB MAHAL, 1 ST FLOOR, 192 DR. D.N. ROAD, MUMBAI-400001 / VS. THE DY. CIT, CIRCLE-3(1), 6 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 ( '#$ /ASSESSEE) ( / REVENUE) P.A. NO.AAACB0107C '#$ / ASSESSEE BY SHRI SUNIL HIRAWAT / REVENUE BY SHRI J.K.GARG-DR BEC IMPEX INTERNATIONAL PVT. LTD. ITA NO.2068/MUM/2012 AND 1055/MUM/2014 2 % & ' ( / DATE OF HEARING : 27/08/2015 ' ( / DATE OF ORDER: 22/09/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) BOTH THESE APPEALS ARE BY THE ASSESSEE FOR ASSESSM ENT YEAR 2008-09 AND 2010-11 CHALLENGING THE RESPECTIVE ORDERS DATED 31/01/2012 AND 27/12/2013 OF THE LD. FIRST AP PELLATE AUTHORITY, MUMBAI. 2. DURING HEARING OF THESE APPEALS, THE LD. COUNSE L FOR THE ASSESSEE, SHRI SUNIL HIRAWAT, DID NOT PRESS GRO UND NO.3(II), (III) AND (IV) OF ITA NO.1055/MUM/2014, T HEREFORE, THESE GROUNDS ARE DISMISSED AS NOT PRESSED. 2.1. FOR REMAINING GROUNDS, THE LD. COUNSEL CONTEN DED THAT IDENTICAL GROUNDS HAVE REMAINED. FIRST, WE SHA LL TAKE UP GROUND NO.1 OF ITA NO.2068/MUM/2012, WHICH PERTAINS TO UPHOLDING THE DISALLOWANCE OF RS.14,41,070/-, BEING 25% OF FOREIGN TOUR EXPENSES, INCURRED BY MS. GITIKA JAIN, DIRECTOR OF THE ASSESSEE COMPANY. THE CRUX OF ARGUMENT IS T HAT ADHOC DISALLOWANCE HAS BEEN MADE, WHICH CANNOT SURV IVE. IT WAS CLAIMED THAT THE IMPUGNED ISSUE IS COVERED IN F AVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL (ITA NO.1910/MUM/2011) ORDER DATED 27/02/2015. THIS FAC TUAL MATRIX WAS NOT CONTROVERTED BY THE LD. DR, HOWEVER, HE CLAIMED THAT THE DISALLOWANCE MAY BE CONFIRMED. BEC IMPEX INTERNATIONAL PVT. LTD. ITA NO.2068/MUM/2012 AND 1055/MUM/2014 3 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE ARE ANALYZING THE AFORESAID ORDER OF THE T RIBUNAL DATED 27/02/2015 (PHOTOCOPY OF THE ORDER SUPPLIED B Y THE LD. COUNSEL FOR THE ASSESSEE). WE NOTE THAT THE TRIBUN AL FOR ASSESSMENT YEAR 2005-06, VIDE ORDER DATED 27/02/201 5 IN THE CASE OF ASSESSEE ITSELF WITH RESPECT TO FOREIGN TOUR EXPENSES OF MS. GITIKA JAIN, DIRECTOR OF THE ASSESS EE COMPANY EXAMINED THE CLAIM OF THE ASSESSEE AND FOUN D THAT SUCH EXPENSES WERE UNDERTAKEN FOR BUSINESS PURPOSES . IT WAS FOUND THAT MS. JAIN, VISITED CHINA IN CONNECTIO N WITH BUSINESS MEETING WITH M/S. SANGHAI ELECTRIC GROUP COMPANY LTD., A JOINT VENTURE BETWEEN SEC AND INDIA N COMPANIES FOR MANUFACTURING AND SUPPLY OF POWER PLA NT RELATED EQUIPMENTS IN INDIA AND ABROAD. THE EFFORTS OF MS. GITIKA JAIN RESULTED IN EARNING OF COMMISSION INCOM E. IT WAS EXPLAINED BEFORE US ALSO, THAT SHE IS TRAVELLING TO VARIOUS COUNTRIES AND THE VISIT YIELDED INCOME TO THE ASSES SEE COMPANY. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE REVENUE, THUS, WE FIND MERIT IN THE APPEAL OF THE A SSESSEE ON THE ISSUE IN HAND, THUS, THIS GROUND OF THE ASSESSE E IS ALLOWED. OUR VIEW WILL COVER IDENTICAL GROUND (1) IN ITA NO.1055/MUM/2014 ALSO. 3. THE NEXT GROUND PERTAINS TO UPHOLDING THE DISALLOWANCE OF RS.3,42,007/-, BEING 25%, ON ADHOC BASIS OUT OF BUSINESS PROMOTION EXPENSES. THE LD. COUNSEL CLAIMED THAT IDENTICALLY THE GROUND OF THE ASSESSEE WAS PAR TLY ALLOWED BEC IMPEX INTERNATIONAL PVT. LTD. ITA NO.2068/MUM/2012 AND 1055/MUM/2014 4 FOR EARLIER ASSESSMENT YEAR. THIS FACTUAL MATRIX WA S NOT CONTROVERTED BY THE LD. DR. 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT FOR A.Y. 2005-06, THERE WAS DISALLOWANCE OF RS.7,10,555 /- OUT OF CLAIMED EXPENSES OF RS.28,99,538/-. THE ASSESSING OFFICER DISALLOWED 20% OF THE CLAIMED EXPENSES. THE TRIBUNA L REDUCED THE AMOUNT OF RS.7,10,555/- TO RS. 2,80,000 /- TO MEET THE ENDS OF JUSTICE, THUS, KEEPING IN VIEW, TH E TOTALITY OF FACTS, WE REDUCE THE DISALLOWANCE OF RS.3,42,071/- TO RS.1,50,000/-, THUS, THIS GROUND OF THE ASSESSEE IS PARTLY ALLOWED. IDENTICALLY, THE AMOUNT OF RS.6,35,236/- I S REDUCED TO RS.2,50,000/- (ITA NO.1055/MUM/2014), CONSEQUENT LY, THIS GROUND IS PARTLY ALLOWED. 4. THE LAST GROUND PERTAINS TO UPHOLDING THE DISALLOWANCE OF RS.7,49,546/- INVOKING THE PROVISIO NS OF SECTION 14A READ WITH RULE 8D OF THE RULES (ITA NO.2068/MUM/2012) AND RS.6,06,451/- (ITA NO.1055/ MUM/2014). THE CRUX OF ARGUMENT ADVANCED ON BEHALF OF THE ASSESSEE IS THAT IT MAY BE RESTRICTED TO 10% OF THE GROSS RECEIPT. THE LD. DR DEFENDED THE CONCLUSION ARRIVE D AT IN THE IMPUGNED ORDER. 4.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT THE ASSESSMENT YEAR INVOLVED ARE 2008-09 AND 2010-11, THEREFORE, IN VIEW OF THE DECISION FROM HONBLE JUR ISDICTIONAL BEC IMPEX INTERNATIONAL PVT. LTD. ITA NO.2068/MUM/2012 AND 1055/MUM/2014 5 HIGH COURT IN GODREJ & BOYCE, RULE 8D OF THE RULES WILL BE APPLICABLE. THUS, WE FIND NO INFIRMITY IN THE CONCL USION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL S), BEING 0.5% IS REASONABLE. THUS, ON THIS GROUND, WE AFFIRM THE STAND OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL S), FINALLY, BOTH THE APPEALS ARE PARTLY ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22/09/2015. SD/ - (ASHWANI TANEJA) S D/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % & MUMBAI; ) DATED : 22/09/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 % 1 ( + ) / THE CIT, MUMBAI. 4. 0 0 % 1 / CIT(A)- , MUMBAI 5. 34 .' , 0 +( ' 5 , % & / DR, ITAT, MUMBAI 6. 6# 7& / GUARD FILE. / BY ORDER, /3+ . //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % & / ITAT, MUMBAI