M/s. Biotronik Medical Devices India Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 1229/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3151 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 07-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E , NEW DELHI BEFORE SH. R.K.PANDA, ACCOUNTANT MEMBER AND MS. BEENA PILLAI, JUDICIAL MEMBER ITA NO. 1229 /DEL/201 6 ASSESSMENT YEAR: 200 8 - 0 9 M/S. BIOTRONIK MEDICAL DEVICES INDIA PVT. LTD. UNIT NO . 805 - 807, 8 TH FLOOR, COMMERCIAL COMPLEX, DLF TOWER - B, JASOLA, NEW DELHI 110044 VS . INCOME TAX OFFICER, WARD - 3 (1) NEW DELHI (APPELLANT) (RESPONDENT) A SSESSEE BY : SH. SANJEEV KUMAR, CA DEPARTMENT BY : SH. ATIQ AHMED, SR.DR DATE OF HEARING: : 2 2/02/2018 DATE OF PRONOUNCEMENT: : 28 /02/2018 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 2 0 .11.2015 OF THE CIT (A), NEW DELHI TO A.Y. 200 8 - 0 9 . 2. LEVY OF PENALTY OF RS. 1,45,613/ - BY THE ASSESSING OFFICER U/S 271 (1) OF THE INCOME TAX ACT WHICH HAS BEEN UPHELD BY THE CIT (A) IS THE ONLY ISSUE RAISED BY THE ASSESSEE IN THE GROUND OF APPEAL. 2.1 FACTS OF THE CASE , IN BRIEF ARE , THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF LIFE SAVINGS AND MEDICAL EQUIPMENTS. IT FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 49,25,691/ - . THE ASSESSING OFFICER COMPLETED THE ITA NO. 1229 /DE L/20 1 6 2 ASSESSMENT U/S 143 (3) ON 23.12.2011 DETERMINING THE TOTAL INCOME AT RS. 75,23,320/ - . IN THE SAID ORDER ONE OF THE ADDITION WAS ON ACCOUNT OF DISALLOWANCE OF FOREIGN TRAVELLING EXPENSES OF RS. 4,71,240/ - ON WHICH PENALTY HAS BEEN LEVIED AND WHICH IS THE SU BJECT MATTER OF APPEAL. THE ASSESSING OFFICER IN THE SAID ORDER DISALLOWED THE CLAIM OF EXPENSES OF RS. 4,71,240/ - UNDER THE HEAD BUSINESS EXPENDITURE FOR SPONSORSHIP OF TWO DOCTORS FOR MEDICAL CONFERENCE WHICH WERE UP HELD BY THE CIT (A) . THE ASSESSING O FFICER, THEREAFTER LEVIED PENALTY U/S 271 (1) ( C ) OF THE ACT AMOUNTING TO RS. 1,45,613/ - . I N APPEAL , THE LD. CIT (A) SUST AINED THE PENALTY SO LE VIED BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF ITS INCOME AND FU RNISHED INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF RS. 4,71,240/ - BY WAY OF CLAIMING EXPENSES ON ACCOUNT OF TOUR OF DOCTORS WHICH IT COULD NOT SUBSTANTIATE WITH DOCUMENTA RY EVIDENCE AND ALSO FAILED TO OFFER ANY EXPLANATION BEFORE THE ASSESSING OFFIC ER. WHILE DOING SO HE ALSO RELIED UPON VARIOUS DECISIONS . 3. A GGRIEVED WITH SUCH ORDER OF THE CIT (A) THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4 . WE HAVE HEARD THE RIVAL ARGUMENTS MADE BY BOTH THE PARTIES AND PURSUED THE MATERIAL AVAILABLE ON REC ORD. WE FIND THE ASSESSEE BEFORE THE ASSESSING OFFICER HAD GIVEN THE FOLLOWING EXPLANATION TOWARDS THE CLAIM OF SUCH EXPENSES. AS WE HAVE ALREADY SUBMITTED AT PAINT (F) OF OUR DATED 12.12.11 THAT COMPANY HAD SPONSORED TWO DOCTORS TO VISIT INTERNATIONAL MEDICAL CONFERENCES. THESE INTERNATIONAL CONFERENCES ARE HELD AT DIFFERENT PLACE IN THE WORLD BY THE INTERNATIONAL MEDICAL BODIES FOR UP GRADATION OF KNOWLEDGE OF THE DOCTORS/MEDICAL BODIES FOR SPONSORSHIP WAS TO EDUCATE INDIAN DOCTORS, WHO ARE PRACTICING IN INDIA , WHERE THE ASSESSEE COMPANY IS SELLING ITS ITA NO. 1229 /DE L/20 1 6 3 PRODUCTS THOSE MEDICAL PROFESSIONALS AFTER ATTENDING THESE CONFERENCES HELP THE COMPANY IN SA L E OF COMPANY PRODUCTS IN INDI A . THEY ARE ALSO REQUESTED BY COMPANY TO CONDUCT SEMINARS FOR OTHER INDIAN DOCTOR S TO APPRISE THEM ABOUT COMPANY PRODUCTS: THESE DOCTORS A RE NOT IN ANY MANNER CONNECTED WITH MANAGEMENT OF THE COMPANY. THE EXPENSE INC URRED IS EXCLUSIVELY FOR BUSINESS EXIGENCY OF THE ASSESSES COMPANY AND IS ALLOWABLE EXPENDITURE* 4. IN OUR OPINION THE AD DITION MADE BY THE ASSESSING OFFICER MAY BE JUSTIFIED. HOWEVER, THE SAME DO ES NOT CALL FOR LEVY OF PENALTY U/S 271 (1) (C) OF THE ACT. HON BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS REPORTED IN 322 ITR 158 HAS HELD THAT A MERE MAKING OF A CLA IM WHICH IS NOT SUSTAINABL E IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. S UCH A CLAIM MADE I N THE RETURN CANNOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS. SINCE, T HE ASSESSEE IN THE INSTA NT CASE HAS GIVEN AN EXPLANATION BEFORE THE ASSESSING OFFICER REGARDING THE CLAIM OF SUCH EXPENSES WHICH MAY NOT BE SUFFICIENT FOR ALLOWING THE EXPENDITURE BUT THE SAME IN OUR OPINION DOES NOT CALL FOR LEVY OF PENALTY U/S 271 (1) OF THE INCOME TAX ACT, 1 961. THEREFORE, WE SET ASIDE THE ORDER OF THE CIT (A) AND DIRECT THE ASSESSING OFFICER TO CANCEL THE PENALTY SO LEVIED. THE APPEAL OF THE ASSESSEE IS ACCORDINGLY ALLOWED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . 10. ORDER PRONOUNC ED ON 28 .02.2018. SD/ - SD/ - ( BEENA PILLAI) ( R. K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER ITA NO. 1229 /DE L/20 1 6 4 *NEHA* DATE: - .02.2018 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPE ALS) 5 . DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 22 .02.2018 PS 2. DRAFT PLACED BEFORE AUTHOR 26 .02.2018 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON .2.2018 PS 7. FILE SENT TO THE BENCH CLERK .2.2018 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.