Appeal details
Counselvise Citation
[2015] 140 COUNSELVISE.COM (IT) 93278 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 5 month(s) 15 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
22-07-2015
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
B
Next Hearing Date
26-05-2015
Assessment Year
2009-2010
Appeal Filed On
07-02-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.1094/M/2013 ASSESSMENT YEAR: 2009-10 M/S. MAMTA ENTERPRISES, PLOT NO.141, GUNDECHA HOUSE, JAWAHAR NAGAR, GOREGAON (W), MUMBAI 400 062 VS. ACIT, RANGE 24(3) MUMBAI (APPELLANT) (RESPONDENT) ITA NO.1696/M/2013 ASSESSMENT YEAR: 2009-10 ACIT, RANGE 24(3) MUMBAI VS. M/S. MAMTA ENTERPRISES, PLOT NO.141, GUNDECHA HOUSE, JAWAHAR NAGAR, GOREGAON (W), MUMBAI 400 062 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIMAL PUNMIYA , A.R. REVENUE BY : SHRI JITENDRA KUMAR, D.R. DATE OF HEARING : 26.05.2015 DATE OF PRONOUNCEMENT : 22 .07.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE TITLED CROSS APPEALS, ONE BY THE REVENUE AND OTHER BY THE ASSESSEE HAVE BEEN DIRECTED AGAINST THE ORDERS OF T HE LD. CIT(A) DATED 17.12.2012, THE SAME WERE HEARD TOGETHER AND ARE BE ING DISPOSED OFF WITH THIS COMMON ORDER. FIRST WE TAKE UP THE REVENUES APPEAL FOR A.Y. 2009-10. ITA NO.1696/M/2013 (FOR A.Y. 2009-10) 2. THE DEPARTMENT HAS TAKEN FOLLOWING GROUNDS OF AP PEAL ARE AS UNDER: 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF EXPENSES O F RS.1,17,80,196/- ITA NOS.1094 & 1696/M/2013 2 WHEREAS THE SAME WERE ONLY PROVISIONS OF EXPENSES A ND NOT CRYSTALLIZED, ALSO ASSESSEE HAS NOT DEDUCTED TDS AS PER THE PROVI SIONS OF SECTION 40(A)(IA) OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.4,93,56 1/- MADE BY THE AO ON ACCOUNT OF NON-GENUINE AND UNPROVED PURCHASES FR OM THE PARTIES LISTED BY THE SALES TAX DEPARTMENT AS SUSPICIOUS DE ALERS AND FURTHER ERRED BY ADMITTING ADDITIONAL EVIDENCE IN CONTR5OVE NTION OF RULE 46A DESPITE ASSESSEE FAILED TO PRODUCE PURCHASERS & PRO OF OF GOODS DELIVERED TO IT DESPITE SEVERAL OPPORTUNITIES GIVEN BY THE AO DURING ASSESSMENT PROCEEDINGS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.1,45,68 4/- MADE BY THE AO TOWARDS SALES PROMOTION EXPENSES AS THE ELEMENT OF PERSONAL AND NON- GENUINE EXPENDITURE IS INVOLVED IN IT. GROUND NO.1. 3. VIDE GROUND NO.1 THE REVENUE HAS AGITATED THE AC TION OF CIT(A) IN DELETING THE ADDITION OF RS.1,17,80,196/- IN RELATI ON TO PROVISION MADE TOWARDS EXPENSES. IN THE ASSESSMENT PROCEEDINGS THE ASSESSI NG OFFICER FOUND THAT THE ASSESSEE HAD MADE PROVISIONS IN RESPECT OF VARIOUS EXPENSES ON WHICH NO TDS HAD BEEN DEDUCTED. THE ASSESSING OFFICER WAS OF THE OPINION THAT THE PROVISION WAS MADE IN RELATION TO CONTINGENT LIABILITY AND TH EREFORE HE HELD THAT THE SAME WAS NOT ALLOWABLE EXPENDITURE. IN APPEAL THE LD. CI T(A) HAS DELETED THE ADDITION OBSERVING AS UNDER: 3.2 I HAVE CAREFULLY CONSIDERED THE ABOVE, SUBMISSION OF THE APPELLANT ALONG WITH THE PAPER BOOK FILED AND THE IMPUGNED AS SESSMENT ORDER. I FIND THAT THE APPELLANT IS FOLLOWING THE PROJECT C OMPLETION METHOD OF ACCOUNTING AND CREDITED THE TOTAL SALES MADE IN THE P & L A/C. RELATED TO ENTIRE PROJECTS DURING THIS ASSESSMENT YEAR. THE AP PELLANT HAD MADE A PROVISION WITH REGARD TO CERTAIN PENDING WORKS, WHI CH COULD BE NOT COMPLETED DURING THE YEAR, AS THE LIABILITY WAS NOT CRYSTALLIZED BY THE END OF THE RELEVANT ACCOUNTING YEAR. IN FACT, THE E NTIRE PROVISION MADE WAS PAID OFF IN THE SUBSEQUENT YEAR. THE DETAILS OF PAYMENTS MADE DURING F.Y.2009-10 ARE AVAILABLE IN PAGES 76 TO 79 OF THE PAPER BOOK. A PERUSAL OF THE PAYMENT DETAILS SHOWS THAT THE PROVI SION MADE WITH RESPECT TO VARIOUS EXPENSES HAVE BEEN PAID OFF WITH OUT MUCH VARIATION. ITA NOS.1094 & 1696/M/2013 3 FOR EXAMPLE, THE PROVISION MADE TOWARDS ALUMINIUM S LIDE WORK WAS RS.5,55,449/- AND I FIND FROM THE DETAILS FILED, EX ACTLY THE SAME AMOUNT WAS PAID DURING THE MONTH OF AUGUST, 2009. SIMILAR WAS THE CASE IN RESPECT OF WATER PROOFING CHARGES RS.38,40,497/-. A SLIGHT VARIATION HAS BEEN NOTICED IN RESPECT OF PAYMENT MADE TOWARDS THE LABOUR CHARGES AND LABOR CONTRACTS. AS AGAINST PROVISIONS MADE OF RS.58,60,960/-, THE ACTUAL PAYMENT WAS RS.60,70,346/-. THE ABOVE FACT R EVEALS THAT PAYMENTS AGAINST THE PROVISION WAS MADE WITH REASON ABLE ACCURACY. AS THE EXPENDITURE WAS NOT CRYSTALLIZED WHILE FINALIZI NG THE ACCOUNTS FOR F.Y.2008-09, THE APPELLANT HAD TO MAKE NECESSARY PR OVISIONS. HENCE, IT CANNOT BE SAID THAT THE ABOVE LIABILITY WAS UNASCER TAINED LIABILITY. IT CAN BE SAID THAT THE APPELLANT HAD MADE A REASONABLE AN D ACCURATE ESTIMATION OF EXPENDITURE PROPOSED TO BE INCURRED I N THE SUBSEQUENT YEAR AS PROVISION. AT NOT STRETCH OF IMAGINATION, I T CAN BE SAID THAT THE ABOVE PROVISION IS A CONTINGENT LIABILITY. 3.2.1. THE DEFINITION AS PER ACCOUNTING STANDARD (AS) 29 WITH REGARD TO PROVISIONS CONTINGENT LIABILITIES IS AS UNDER: A CONTINGENT LIABILITY IS:- (A) A POSSIBLE OBLIGATION THAT ARISES FROM PAST EVENTS AND THE EXISTENCE OF WHICH WILL BE CONFIRMED ONLY BY THE OCCURRENCE OR NONOCCURRENCE OF ONE OR MORE UNCERTAIN FUTURE EVENTS NOT WHOLLY WITHIN THE CONTROL OF THE ENTERPRISE; OR (B) A PRESENT OBLIGATION THAT ARISES FROM PAST EVENTS BUT IS NOT RECOGNIZED BECAUSE: (I) IT IS NOT PROBABLE THAT AN OUTFLOW OF RESOURCES EMB ODYING ECONOMIC BENEFITS WILL BE REQUIRED TO SETTLE THE OBLIGATION: OR (II) A RELIABLE ESTIMATE OF THE AMOUNT OF THE OBLIGATION CANNOT BE MADE. PROVISION:- 14. A PROVISION SHOULD BE RECOGNIZED WHEN: (A) AN ENTERPRISE HAS A PRESENT OBLIGATION AS A RES ULT OF A PAST EVENT: (B) IT IS PROBABLE THAT AN OUTFLOW OF RESOURCES EMB ODYING ECONOMIC BENEFITS WILL BE REQUIRED TO SETTLE THE OBLIGATION: AND (C) A RELIABLE ESTIMATE CAN BE MADE OF THE AMOUNT O F THE OBLIGATION IF THESE CONDITIONS ARE NOT MET, NO PROVISIONS SHOULD BE REC OGNIZES. 3.2.2 FROM THE ABOVE DEFINITION, IT IS CLEAR THE FINDING OF THE A.O. THAT THE PROVISIONS MADE WERE UNASCERTAINED AND HENCE, I T WAS CONTINGENT LIABILITY CANNOT BE ACCEPTED. AS MENTIONED ALREADY THE APPELLANT HAD MADE FAIRLY AN ACCURATE ESTIMATE OF THE EXPENDITURE TO BE INCURRED IN THE SUBSEQUENT YEARS AS PROVISION. THE DECISIONS RELIED ON BY THE APPELLANT ABOVE SUP PORTS ITS CASE. ALLOWABILITY OF PROVISION TOWARDS MEETING THE WARRA NTY EXPENDITURE AND PROVISION FOR FOREIGN EXCHANGE LOSSES HAVE BEEN DEC IDED BY VARIOUS JUDICIAL FORUMS. ALL THESE DECISIONS RENDERED ALSO GOES IN FAVOUR OF ITA NOS.1094 & 1696/M/2013 4 APPELLANT. AS MENTIONED ABOVE APPELLANT HAVING DISC LOSED THE ENTIRE PROFIT, SHOULD BE ALLOWED THE BENEFIT OF THE PROVIS ION MADE AS EXPENDITURE WHILE COMPUTING THE INCOME AS RELIABLE ESTIMATE WAS MADE. IN VIEW OF THE ABOVE DISCUSSION, THE PROVISION MADE HAS TO BE ALLOWED AS EXPENDITURE AND ACCORDINGLY, THE ASSESSING OFFICER IF DIRECTED TO ALLOW THE SAME. THEREFORE, THIS GROUND OF APPEAL IS ALLOWED . 4. WE FIND THAT THE LD. CIT(A) HAS GIVEN A CATEGORI CAL FINDINGS AFTER GOING THROUGH THE DETAILS OF PAYMENTS MADE DURING THE SUB SEQUENT YEAR THAT THE LIABILITY OF THE ASSESSEE AT THE END OF THE FINANCI AL YEAR WAS NOT CRYSTALLIZED BUT IT WAS NOT AN UNASCERTAINED LIABILITY. THE PAYMENT WAS MADE IN THE SUBSEQUENT YEAR WITHOUT MUCH VARIATION. THE LD. CIT(A) HAS GIV EN EXAMPLE OF VARIOUS EXPENSES, THE PROVISIONS FOR WHICH WAS MADE BY THE ASSESSEE FOR YEAR UNDER CONSIDERATION BUT THE PAYMENT WAS MADE DURING THE S UBSEQUENT YEAR. WE DO NOT FIND ANY INFIRMITY IN THE WELL REASONED ORDER O F THE CIT(A) ON THIS ISSUE AND THE SAME IS ACCORDINGLY UPHELD. GROUND NO.2 5. THE REVENUE HAS AGITATED THE ACTION OF THE CIT(A ) IN DELETING THE ADDITION OF RS.4,93,561/- MADE BY THE AO ON ACCOUNT OF NON-GENUINE AND UNPROVED PURCHASES MADE BY THE ASSESSEE FROM THE PA RTIES LISTED BY SALES TAX DEPARTMENT AS SUSPICIOUS DEALERS. THE ASSESSING OFF ICER ON THE BASIS OF INFORMATION AVAILABLE ON THE OFFICIAL WEBSITE OF TH E SALES TAX DEPARTMENT REGARDING THE LIST OF SUSPICIOUS DEALERS, IDENTIFIE D TWO PARTIES VIZ. M/S. MANAV IMPEX AND M/S. NATIONAL TRADING CO. FROM WHOM THE A SSESSEE HAD MADE PURCHASES DURING THE YEAR UNDER CONSIDERATION. HE A SKED THE ASSESSEE TO EXPLAIN THE GENUINENESS OF PURCHASES IN RESPECT OF ABOVE TWO PARTIES. THE ASSESSEE FURNISHED THE NECESSARY DETAILS SUCH AS CO PIES OF BILLS AND DELIVERY CHALLANS ETC. HOWEVER, COULD NOT PRODUCE THE ABOVE STATED PARTIES BEFORE THE AO. THE AO THEREFORE, HELD THAT THE PURCHASES MADE FROM ABOVE TWO PARTIES WERE BOGUS. IN APPEAL THE ASSESSEE APART FROM DETAI LS AND DELIVERY CHALLANS ITA NOS.1094 & 1696/M/2013 5 REGARDING THE PURCHASES ALSO FURNISHED THE LEDGER O F THE ABOVE STATED PARTIES IN THE BOOKS OF ACCOUNT OF THE ASSESSEE, COPIES OF INV OICES ISSUED BY THE ABOVE STATED PARTIES, COPIES OF PAYMENTS MADE TO THE ABOV E STATED PARTIES, COPIES OF THE BANK STATEMENTS TO SHOW THAT THE PAYMENTS WERE MADE TO THE ABOVE STATED PARTIES THROUGH BANKING CHANNEL. THE LD. CIT(A), AF TER CONSIDERING OVER ALL FACTS AND CIRCUMSTANCES OF THE CASE DELETED THE ADD ITION ON THIS ISSUE OBSERVING AS UNDER: 6.2 I HAVE CAREFULLY CONSIDERED THE IMPUGNED ASSESSMEN T ORDER AND THE ABOVE SUBMISSION OF THE APPELLANT AND THE DETAI LS FILED ALONG WITH THAT THE APPELLANT HAD CARRIED OUT THE WORK RELATED TO PROJECT AT GUNDECHA HILLS, POWAI AND IT HAD MADE PURCHASES FRO M MANAV IMPLEX AND NATIONAL TRADING CO. FOR RS.2,52,281/- AND RS.2 ,41,280/- RESPECTIVELY. THE APPELLANT SUBMITTED THAT COPIED O F THE BILLS AND DELIVERY CHALLANS REGARDING PURCHASES MADE FROM THE SE PARTIES. WITH REGARD TO THE M/S. MANAV IMPLEX THE APPELLANT HAD PURCHASED MORTIGE HANDLE LOCK VIDE INVOICE NO.196 DTD.23/11/2 007 FOR RS.2,52,281/- & THE PAYMENT FOR THE SAME WAS MADE B Y AN ACCOUNT PAYEE CHEQUE NO.799386 ON 07/06/2008. MANAV IMPLEX HAD PAID VAT OF RS.17,089/- FOR THE PERIOD 01/07/2006 TO 30/09/2006 THE CHALLAN FOR THE SAME WAS ENCLOSED WHICH IS AVAILABLE IN PAGE NO.85 OF THE PAPER BOOK. FURTHER WITH REGARDS TO NATIONAL TRADING CO. THE AP PELLANT HAD PURCHASED STEEL, METAL VIDE THEIR INVOICE NO.034 DT D. 11/02/2008 FOR RS.2,41,286/- AND PAYMENT WAS MADE BY AN ACCOUNT PA YEE CHEQUE NO.803176 DTD.8/07/2008. IN SUPPORT OF ITS CONTENTION THE APPELLANT HAD ALS O FURNISHED THE FOLLOWING: 1.LEDGER OF THE ABOVEMENTIONED PARTIES IN THE BOOKS OF MAMTA ENTERPRISES 2.COPIES OF INVOICES ISSUED BY THE ABOVEMENTIONED P ARTIES 3.COPIES OF BANK PAYMENT MADE TO THE PARTIES AGAINS T THE PURCHASES. 6.3 I HAVE PERUSED THE ABOVE COPIES OF INVOICE TOWARD PURCHASE OF VARIOUS MATERIALS AND EACH INVOICE SHOWS THE M-VAT NO./VAT TIN NO.& CST NO. IT IS THE CLAIM OF THE APPELLANT THAT PAYMENTS TO ALL THE PURCHASES HAVE BEEN MADE BY WAY OF ACCOUNT PAYEE CH EQUES. THE ABOVE CLEARLY INDICATES THAT THE PARTIES EXISTING. THE AS SESSING OFFICER COULD HAVE MADE DUE VERIFICATION OF THE SUPPLIERS BASED O N THE VAT NO. AND CST NO. IN CASE, THE GENUINENESS WAS DOUBTED. FURTH ER, THE ACCOUNT ITA NOS.1094 & 1696/M/2013 6 PAYEE CHEQUES HAVE BEEN CLEARED THROUGH THE BANK AC COUNTS OF THE SUPPLIERS. THE ASSESSING OFFICER COULD HAVE VERIFIE D THE DETAILS OF CLEARINGS AS TO WHETHER IMMEDIATELY AFTER THE CHEQU E WAS ISSUED; CASH WAS WITHDRAWN FOR THE PURPOSE OF HANDING IT OVER TO THE APPELLANT. THE ASSESSING OFFICER FAILED TO CARRY OUT THIS ENQUIRY ALSO. THE AFORESAID FACTS AND THE SUPPORTING EVIDENCE FIL ED CLEARLY (I.E. VOUCHERS/BILLS) PROVES THAT THE PURCHASE ARE GENUIN E, AS ALL THE PAYMENTS TO THE SUPPLIER WERE SETTLED THROUGH CROSS ACCOUNT PAYEE CHEQUES. VAT HAD BEEN DEDUCTED AND PAID BY THE SUPPLIERS AND THE SE TRANSACTIONS ARE APPEARING IN THEIR BOOKS OF ACCOUNTS. MERELY BECAUS E THE PARTIES COULD NOT BE PRODUCED BY THE APPELLANT, THE ENTIRE PURCHA SES CANNOT BE TREATED AS BOGUS BY THE ASSESSING OFFICER WHEN THE ASSESSIN G OFFICER HAS NOT GATHERED ANY OTHER EVIDENCES TO SHOW THAT REALLY TH E APPELLANT DID NOT CARRY OUT THE WORK USING THE MATERIALS PURCHASED. I N VIEW OF THE ABOVE, THE ADDITION MADE BY THE ASSESSING OFFICER IS DELET ED. THIS GROUND OF APPEAL IS ALLOWED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES. WE FIND THAT THE LD. CIT(A) AFTER EXAMINING THE DETAILED EVIDENCES F URNISHED BY THE ASSESSEE TO PROVE THE GENUINENESS OF THE PURCHASES HAS DELETED THE ADDITIONS SO MADE BY THE AO. HE HAS CATEGORICALLY OBSERVED THAT ALL THE PAYMENTS WERE MADE BY THE ASSESSEE THOROUGH, BANKING CHANNEL, VAT HAD BEEN DE DUCTED AND PAID BY THE SUPPLIER AND THE TRANSACTIONS WERE APPEARING IN THE IR BOOKS OF ACCOUNTS. HE HAS HELD THAT MERELY BECAUSE THE PARTIES COULD NOT BE P RODUCED BY THE ASSESSEE, BEFORE THE AO, THE PURCHASES CANNOT BE TREATED AS B OGUS. HE HAS ALSO OBSERVED THAT ALL THE DETAILS OF VOUCHERS AND INVOICES WERE AVAILABLE ON RECORD. EACH INVOICE SHOWED THE M-VAT NO./VAT TIN NO & CST NO. E TC.. HE THEREFORE, HELD THAT THE ASSESSEE HAD PROVED GENUINENESS OF TH E PURCHASES. ADMITTEDLY, THERE WAS NO EVIDENCE THAT THE AMOUNT PAID BY THE A SSESSEE THROUGH BANKING CHANNEL FOR THE PURCHASES FROM THE ABOVE STATED TWO PARTIES, HAD EVER COME BACK TO THE ASSESSEE IN ANY OTHER FORM. THERE WAS N O EVIDENCE THAT THE SAID CONCERNS GAVE BOGUS VOUCHERS TO THE ASSESSEE. MEREL Y BECAUSE THEIR NAME APPEARED IN THE LIST OF SALES TAX DEPARTMENT THAT I TSELF WOULD NOT BE GRANTED FOR HOLDING THE PURCHASES BOGUS. HONBLE GUJARAT HI GH COURT IN THE ITA NOS.1094 & 1696/M/2013 7 CASE OF CIT VS. M.K. BROTHERS (1987) 163 ITR 249 HAS HELD THAT WHERE THERE WAS NOTHING TO INDICATE THAT THE AMOUNT GIVEN BY TH E ASSESSEE FOR THE PURCHASES MADE HAD COME BACK TO THE ASSESSEE IN ANY OTHER FOR M AND WHERE THERE WAS NO EVIDENCE THAT THE SAID CONCERNS GAVE BOGUS VOUCHERS TO THE ASSESSEE AND EVEN THE STATEMENTS MADE BY THE ALLEGED SUPPLIERS IN NO WAY IMPLICATE THE TRANSACTION WITH THE ASSESSEE THEN UNDER SUCH CIRCU MSTANCES IT CANNOT BE SAID THAT ENTRIES FOR THE PURCHASE OF GOODS MADE IN THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE BOGUS AND NO ADDITION IN THIS RESPECT CAN BE MADE. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER O F CIT(A) ON THIS ISSUE ALSO AND THE SAME IS ACCORDINGLY UPHELD. GROUND NO.3 7. GROUND NO.3 IS RELATING TO THE ADDITION OF RS.1,45, 684/- MADE BY THE AO TOWARDS SALES PROMOTION EXPENSES AS THE ELEMENT OF PERSONAL AND NON-GENUINE EXPENDITURE MIGHT BE INVOLVED IN RELATION TO SAID E XPENDITURE. THE LD. CIT(A) DELETED THE ADDITION OBSERVING THAT THERE WAS NO EV IDENCE BROUGHT ON RECORD OR ANY MATERIAL TO SHOW THAT THE ELEMENT OF PERSONAL E XPENDITURE WAS INVOLVED IN THE ABOVE STATED EXPENSES. HE HELD THAT IN THE ABSE NCE OF ANY EVIDENCE, THE AO WAS NOT JUSTIFIED IN MAKING AD HOC ADDITION @ OF 20 % OF THE SALES PROMOTION EXPENSES. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) ON THIS ISSUE ALSO. THE APPEAL OF THE REVENUE IS THEREFORE DISMIS SED. NOW, WE TAKE UP THE ASSESSEES APPEAL: ITA NO.1094/MUM/2013 8. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1.THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWA NCE OF RS.10,14,296/- TOWARDS THE FOREIGN TRAVELLING EXPEN SES AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE FIRM. 2. THE LD. CIT(A) ERRED IN CONFIRMING THE INTEREST CHARGED U/S 234A, 234B & 234C OF THE I.T. ACT, 1961. ITA NOS.1094 & 1696/M/2013 8 3. THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY I NITIATED U/S.271(1)(C) OF THE I.T. ACT, 1961 . GROUND NO.1 9. THE ONLY EFFECTIVE ISSUE TAKEN BY THE ASSESSEE I S IN RELATION TO CONFIRMATION OF DISALLOWANCE OF RS.10,14,296/- TOWA RDS THE FOREIGN TRAVELLING EXPENSES. THE LD. CIT(A) HAS CONFIRMED PART DISALLO WANCE IN RELATION TO FOREIGN TRAVEL OF THE PARTNER OF THE FIRM ALONG WIT H HIS FAMILY OBSERVING AS UNDER: 4.2 I HAVE GONE THROUGH THE IMPUGNED ASSESSMENT OR DER AND THE WRITTEN SUBMISSIONS OF THE AR OF THE APPELLANT. THE APPELLANT COULD JUSTIFY THE PURPOSE OF VISIT MADE BY SHRI PARAS D. GUNDECHA, AND THEREBY EXPLAINED THE COST OF RS.96,148/- UNDERTAKE N TO HONGKONG, WHICH WAS PRIMARILY TO ATTEND CREDAI CONFERENCE, WHERE THE BUILDERS FROM ALL OVER THE WORK MEETS. AS FAR AS THE TRAVEL MADE TO LONDON, MILAN, DUBAI AND CAIRO, THE APPELLANT DID NOT GIVE ANY SPECIFIC REASON FOR MAKING SUCH FOREIGN TRIPS AND CLAIMED THAT THE FIRM NEED TO UPDATE IT WITH INNOVATIVE TECHNOLOGIES AND TO ATTRACT THE CUS TOMERS, APPEARS TO BE GENERAL IN NATURE. HENCE, THE EXACT PURPOSE, FOR WH ICH SUCH TRIPS HAVE UNDERTAKEN BY THE FAMILY MEMBERS OF THE PARTNER OF THE FIRM, HAS NOT BEEN PROVED BY THE APPELLANT. FURTHER, THE DESTINAT IONS UNDERTAKEN BY THE PARTNERS OF THE FIRM, PARTICULARLY VISIT TO CAI RO IN EGYPT CLEARLY SHOWS THAT IT IS ONLY A PERSONAL TRIP. THE RELIANCE PLACED BY THE APPELLANT ON THE DECISIONS DISCUSSED IN PARA 4.1 AB OVE ARE MISPLACED. 4.2.1 IN VIEW OF THE ABOVE, THE ASSESSING OFFICER I S DIRECTED TO ALLOW THE EXPENSES OF RS.96,148/- ONLY RELATED TO HONG KONG T RIP OUT OF THE ENTIRE FOREIGN TRAVEL EXPENDITURE CLAIMED AT RS.11,10,444/ - AND THE BALANCE DISALLOWANCE MADE BY THE ASSESSING OFFICE IS HEREBY CONFIRMED. THIS GROUND OF APPEAL RAISED BY THE APPELLANT IS PARTLY ALLOWED. 10. WE FIND THAT LD. CIT(A) HAS PROPERLY APPRECIATE D THE FACTS ON THE FILE AND HAS HELD THAT THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THE EXPENDITURE IN RELATION TO FOREIGN TRAVEL OF THE PA RTNER OF THE FIRM MADE TO LONDON, MILAN, DUBAI AND CAIRO. HOWEVER, THE VISIT TO HONGKONG WAS PROVED TO BE FOR BUSINESS PURPOSE. HE, THEREFORE, HAS RIGH TLY ALLOWED THE EXPENDITURE OF RS.96,148/- IN RELATION TO HONGKONG TRIP OF THE PARTNER AND DISALLOWED THE ITA NOS.1094 & 1696/M/2013 9 REMAINING EXPENDITURE. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) ON THIS ISSUE AND THE SAME IS UPHELD. GROUND NO.2 11. GROUND NO.2 IS IN RELATION TO INTEREST CHARGED U/S.234A, 234B & 234C OF THE I.T. ACT 1961 WHICH BEING CONSEQUENTIAL IN NATU RE, DOES NOT REQUIRE ANY ADJUDICATION. GROUND NO.3 12. GROUND NO.3 IS IN RELATION TO INITIATION OF PEN ALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT, WHICH IS IN OUR VIEW IS P REMATURE AT THIS STAGE AND DOES NOT REQUIRE ANY ADJUDICATION. THE APPEAL OF TH E ASSESSEE IS THEREFORE DISMISSED. 13. IN THE RESULT, THE APPEALS OF REVENUE AS WELL A S ASSESSEE IS HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.07.2015. SD/- SD/- (G.S.PANNU) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 22.07.2015 * PATEL . P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.
