ACIT 16(1), MUMBAI V. RISHI K RAJANI, MUMBAI

ITA 1070/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2838 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 11-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 07-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BE NCH, MUMBAI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER / I .T.A. NO.4912/MUM/2011 ( / ASSESSMENT YEAR:2006-07 MR. RISHI K. RAJANI, BHAGWAT NIWAS, PEDDAR ROAD, MUMBAI - 400 026 / VS. THE ACIT-16(1), MATRU MANDIR, MUMBAI-400 007 / I .T.A. NO.7223/MUM/2012 ( / ASSESSMENT YEAR:2008-09 THE ACIT-16(1), MATRU MANDIR, MUMBAI-400 007 / VS. MR. RISHI K. RAJANI, BHAGWAT NIWAS, PEDDAR ROAD, MUMBAI-400 026 / I .T.A. NOS.1070 & 1071/MUM/2013 ( / ASSESSMENT YEAR:2007-08 & 2009-10 THE ACIT-16(1), MATRU MANDIR, MUMBAI-400 007 / VS. MR. RISHI K. RAJANI, BHAGWAT NIWAS, PEDDAR ROAD, MUMBAI-400 026 ./ ./ PAN/GIR NO. : AABPR 0602C ( / APPELLANT ) .. ( / RESPONDENT ) / ASSESSEE BY: SHRI JITENDRA JAIN / REVENUE BY: SHRI SANJEEV KASHYAP / DATE OF HEARING : 19.10.2015 ! / DATE OF PRONOUNCEMENT :28.10.2015 '# / O R D E R PER N.K. BILLAIYA, AM: ITA. NO.4912/M/2011 ITA NO. 7223/M/12 ITA NO. 1070 & 1071/M/13 2 ALL THESE APPEALS WERE HEARD TOGETHER AS THEY INVO LVED COMMON ISSUES AND ARE DISPOSED OF BY THIS CONSOLIDA TED ORDER FOR THE SAKE OF CONVENIENCE. 2. ITA NO. 4912/MUM/2011 IS THE APPEAL BY THE ASSES SEE AND ALL OTHER APPEALS ARE BY THE REVENUE. THE COMMON GRIEV ANCE IS IN RELATION TO THE DISALLOWANCE OUT OF FOREIGN TRAVEL EXPENSES. 2.1. IN A.Y. 2006-07, FOREIGN TRAVEL EXPENSES CLAIM ED BY THE ASSESSEE WAS AT RS. 35,18,487/-. THE AO DISALLOWED 1/3 RD OUT OF IT AT RS. 11,72,829/-. THE DISALLOWANCE WAS CONFIRMED BY THE LD. CIT(A). HENCE, ASSESSEE IS IN APPEAL. 2.2. IN A.Y. 2007-08, THE CLAIM OF THE EXPENSES WER E RS.41,21,040/-. THE AO DISALLOWED 1/3 RD AT RS. 13,73,680/-. THE LD. CIT(A) RESTRICTED THE DISALLOWANCE TO 10% OF THE IMPUGNED EXPENSES. HENCE REVENUE IS IN APPEAL, 2.3. FOR A.Y 2008-09, THE CLAIM WAS AT RS. 70,67,18 2/-. THE DISALLOWANCE WAS AT RS. 23,55,727/- WHICH WAS RESTR ICTED AT RS. 1,69,810/-. 2.4. FOR A.Y 2009-10, THE CLAIM OF FOREIGN TRAVEL E XPENSES WAS AT RS. 83,36,883/-. THE DISALLOWANCE WAS AT RS. 27,78,961 /- WHICH WAS RESTRICTED BY THE LD. CIT(A) AT RS. 1,63,964/-. 3. RIVAL CONTENTIONS WERE HEARD AT LENGTH. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE PAST HISTORY OF THE ASSESSEE. THE ASSESSEE IS ENGAGED IN THE BUSIN ESS OF DESIGNING, MANUFACTURING, TRADING AND EXPORTING OF WESTERN LAD IES DRESSES. FOR ITA. NO.4912/M/2011 ITA NO. 7223/M/12 ITA NO. 1070 & 1071/M/13 3 THIS PURPOSE, THE ASSESSEE HAS TO TRAVEL TO VARIOUS COUNTRIES FOR NOT ONLY MARKET ITS DESIGNS AND DRESSES BUT ALSO TO FIN D OUT THE LATEST TRENDS AND DESIGNS PREVAILING IN VARIOUS COUNTRIES. 3.1. FOR A.Y 2004-05, THE LD. CIT(A) RESTRICTED TH E DISALLOWANCE TO RS. 2.50 LAKHS OUT OF TOTAL FOREIGN TRAVELLING EXPE NSES OF RS. 51 LAKHS WHICH WORKS OUT TO 5%. BOTH THE PARTIES HAVE ACCEP TED THIS ORDER OF THE LD. CIT(A). THE IMPUGNED ASSESSMENT YEAR BEFOR E US NOW ARE SUBSEQUENT TO A.Y. 2004-05. 3.2. AFTER GIVING A THOUGHTFUL CONSIDERATION TO THE FACTUAL MATRIX, IN OUR CONSIDERED OPINION, THE LD. CIT(A) HAS CORRECTL Y RESTRICTED THE DISALLOWANCE TO 10% FOR ASSESSMENT YEARS 2007-08, 2 008-09 AND 2009-10. THEREFORE, NO INTERFERENCE IS CALLED FOR, IN SO FAR AS THESE ASSESSMENT YEARS ARE CONCERNED. APPEALS OF THE REV ENUE FOR THESE ASSESSMENT YEARS ARE ACCORDINGLY DISMISSED. 4. COMING BACK TO ASSESSEES APPEAL IN 2006-07, AS THE LD. CIT(A) HAS OBSERVED THAT THE ASSESSEE HAS FAILED TO FURNIS H NECESSARY DETAILS/BIFURCATIONS OF FOREIGN TRAVEL EXPENDITURE UNDER VARIOUS HEADS. IN OUR CONSIDERED OPINION, DISALLOWANCE OF 20% SHOULD MEET THE ENDS OF JUSTICE. WE, ACCORDINGLY, DIRECT THE A O TO RESTRICT THE DISALLOWANCE TO 20% OF THE FOREIGN TRAVEL EXPENSES. ASSESSEES GRIEVANCE IS PARTLY ALLOWED. 5. IN SO FAR AS OTHER DISALLOWANCES FOR ASSESSMENT YEAR 2006-07 IS CONCERNED, WE FIND THAT THE DISALLOWANCES ARE MADE FOR THE EXPENDITURES CLAIMED UNDER THE HEAD: A) BUSINESS PROMOTION ITA. NO.4912/M/2011 ITA NO. 7223/M/12 ITA NO. 1070 & 1071/M/13 4 B) MOTOR CAR EXPENSES C) TELEPHONE EXPENSES D) MEMBERSHIP & SUBSCRIPTION EXPENSES. 5.1. THE LD. CIT(A) HAS RESTRICTED THE DISALLOWANCE S TO 10% OF THE RESPECTIVE EXPENDITURES. WE, THEREFORE, DO NOT FIN D ANY INFIRMITY IN THE FINDINGS OF THE LD. CIT(A). GROUND NO. 2,3,4 & 5 ARE ACCORDINGLY DISMISSED. 6. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED AND THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH OCTOBER, 2015 SD/- SD/- (AMARJIT SINGH ) (N.K. BILLAIYA) $% ' /JUDICIAL MEMBER ' / ACCOUNTANT MEMBER & ' MUMBAI; (' DATED : 28 TH OCTOBER, 2015 . % . ./ RJ , SR. PS !' #' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT(A)- 4. ) / CIT 5. *+, %%-. , -.! , & ' / DR, ITAT, MUMBAI 6. ,/0 1 / GUARD FILE. $ / BY ORDER, * % //TRUE COPY// % / $& ' (DY./ASSTT. REGISTRAR) , & ' / ITAT, MUMBAI