Global Green Compnay Ltd., New Delhi V. DCIT, New Delhi

ITA 1187/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52794 (ITAT-DELHI)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-10-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 04-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MONGA
• Assessee Lawyers: AKHIL MAHAJAN; KUM REENA LAMA

Judgement Text

ITA NO. 1187/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 1187/DEL/2011 A.Y. : 2006-07 GLOBAL GREEN COMPANY LIMITED, THAPAR HOUSE, 124, JANPATH, NEW DELHI 110 001 (PAN: AAACR 0635H) VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 12(1), DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. AKHIL MAHAJAN, CA AND KUM. REENA LAMA, CA DEPARTMENT BY : SH. A.K. MONGA, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 24.12. 2010 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE GROUNDS READ AS UNDER:- (I) THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS WRONG IN CONFIRMING ADDITION OF ` 323,584/- AS FRI NGE BENEFIT COMPUTED @20% ` 1,617,919/-, OUT OF ` 25,646,219/- DEBITED IN ACCOUNTS UNDER THE GROUPING S OF ACCOUNT HEAD TRAVELLING EXPENSES AND SALES AND B USINESS PROMOTIONAL EXPENSES. ITA NO. 1187/DEL/2011 2 GENERAL (II) THAT THE ABOVE GROUNDS ARE INDEPENDENT AND WIT HOUT PREJUDICE TO EACH OTHER. (III) THAT THE ORDER IS OTHERWISE BAD IN LAW. 3. IN THIS CASE IN THE ASSESSMENT ORDER, THE ASSESSI NG OFFICER HAS MADE IMPUGNED ADDITIONS ON ACCOUNT OF FRINGE BENEFIT AND ADDED THE SUM OF ` 3,23,584/-. THE ADDITIONS WERE MADE BY THE ASSESSING OFFICER BY OBSERVING AS UNDER:- THE ASSESSEE HAS DECLARED TOTAL AMOUNT ELIGIBLE FR INGE BENEFIT UNDER THE ABOVE HEADS AS UNDER:- A) ENTERTAINMENT ` 48,129/- B) SALES PROMOTION ` 1,32,293/- C) CONVEYANCE, TOUR, ETC. ` 57,04,852/- D) USE OF HOTEL ` 1,81,22,748/- E) MAINTENANCE OF ` 20,278/- ACCOMMODATION AS TOTAL = ` 2,40,28,300/- GUEST HOUSE. HOWEVER, EXAMINATION OF PROFIT AND LOSS ACCOUNT AND OTHER ACCOUNTS, IT REVEALS THAT THE ASSESSEE HAS SH OWN FOLLOWING EXPENSES:- (A) TRAVELLING AND CONVEYANCE ` 1,43,31,802/- (B) BUSINESS PROMOTION ` 1,13,14,417/- TOTAL = ` 2.56.46.219/- ITA NO. 1187/DEL/2011 3 THOUGH SPECIFICALLY ASKED, BUT THE ASSESSEE HAS NOT FURNISHED ANY BIFURCATION OR DETAILS OF THESE EXPE NSES. IF IT IS TREATED THAT THE EXPENSES DECLARED BY THE ASSESS EE ARE INCLUDED IN THE EXPENSES DEBITED IN P&L ACCOUNT UNDE R THE ABOVE HEADS, THERE REMAINS A DIFFERENCE OF ` 16,17, 919/- WHICH IS ELIGIBLE FOR FRINGE BENEFIT. AS SUCH 20% OF ` 16,17,919/- WHICH WORKS OUT TO ` 3,23,584/- WILL BE ADDED TO TOTAL FRINGE BENEFIT DECLARED. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS CONFIRMED THE ADDITION, AS THE ASSESS EE COULD NOT RECONCILE THE DIFFERENCE ON ACCOUNT OF TRAVELLING A ND BUSINESS PROMOTIONAL EXPENSES AS DEBITED IN THE P&L ACCOUNT AND THAT OFFERED FOR A FRINGE BENEFIT. 5. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BEF ORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. LD. COUNSEL OF THE ASSESSEE TOOK US TO THE PAPER BOOK AT PAGE NO. 53 AND HAS SUBMITTE D THAT THERE IS DUE RECONCILIATION AND HENCE, THE ADDITION SHOULD BE DELETED. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. IN OU R CONSIDERED OPINION, THE INTEREST OF JUSTICE WILL BE SERVED, IF THE MATTER IS REMITTED TO THE FILES OF THE ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH. HENCE, THE ASSESSING OFFICER IS DIRECTED TO GO THR OUGH THE ASSESSEES ITA NO. 1187/DEL/2011 4 RECONCILIATION IN THIS REGARD. ACCORDINGLY, THE MATTER STANDS REMITTED TO THE FILE OF THE ASSESSING OFFICER. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 04/10/2011, UPON CONCLUSION OF HEARING. SD/- SD/- [ [[ [C.L. SETHI C.L. SETHI C.L. SETHI C.L. SETHI] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 04/10/2011 SRB COPY FORWARDED COPY FORWARDED COPY FORWARDED COPY FORWARDED TO: TO: TO: TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES