M/s. Manisha Creations , Howrah V. ACIT, Circle - 48, Kolkata , Kolkata

ITA 1251/KOL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1374 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 06-06-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHANKAR HALDER
• Keywords: Depreciation; Corroborative evidences; Set aside
• Section: 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA D BENCH, KOLKATA [BEFORE SRI P.M. JAGTAP, VICE-PRESIDENT & SRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER] I.T.A. NO. 1251/KOL/2018 ASSESSMENT YEAR: 2014-15 M/S. MANISHA CREATIONS...............................................APPELLANT 103/24/1, FORESHORE ROAD BINANI METAL COMPLEX HOWRAH 711 102 [PAN : AAIFM 3397 C] ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-48, KOLKATA..................RESPONDENT APPEARANCES BY: SHRI RIP DAS, ADVOCATE, APPEARED ON BEHALF OF THE ASSESSEE. SHRI SHANKAR HALDER, JCIT, SR. DR APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : MARCH 4 TH , 2019 DATE OF PRONOUNCING THE ORDER : MARCH 15 TH , 2019 O R D E R PER S.S. VISWANETHRA RAVI, JM :- THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-14, KOLKATA, (HEREINAFTER THE LD. CIT (A)), DT. 04/05/2018, PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (THE ACT), RELATING TO THE ASSESSMENT YEAR 2014-15. 2. GROUND NO. 1 IS RELATING TO THE CONFIRMATION OF AN ADDITION MADE ON ACCOUNT OF FOREIGN TRAVEL EXPENSES. 3. HEARD BOTH PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE IS A PARTNERSHIP FIRM AND ENGAGED IN THE BUSINESS OF PACKAGING AND PRINTING. THE ASSESSEE HAS DEBITED AN AMOUNT OF RS.6,09,304/- UNDER THE HEAD TRAVELLING EXPENSES IN THE PROFIT AND LOSS ACCOUNT. ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE DEBITED A SUM OF RS.3,64,772/-, ON ACCOUNT OF PAYMENT TO CLUB MAHINDRA HOLIDAYS PVT. LTD. AND HELD THAT SINCE THE SAID AMOUNT HAS BEEN PAID FOR A LEISURE HOLIDAY, WHICH IS PERSONAL IN NATURE, DOES NOT CONSTITUTE TRAVELLING EXPENDITURE INCURRED FOR WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. THE LD. CIT(A) CONFIRMED THE VIEW OF THE ASSESSING OFFICER. BEFORE US, THE LD. A/R REFERRED TO PAGE NOS. 5, 6 & 7 OF THE PAPER BOOK AND SUBMITTED THAT THE ASSESSEE 2 I.T.A. NO. 1251/KOL/2018 ASSESSMENT YEAR: 2014-15 M/S. MANISHA CREATIONS RECEIVED AN INVITATION TO PARTICIPATE IN THE EXHIBITION CHINA PRINT 2013 IN CHINA AND MR. ANIRUDH KHEMKA AND MR. SIDDHARTH SINGHANIA, REPRESENTING THE ASSESSEE PARTICIPATED IN THE SAID EXHIBITION. HE FURTHER SUBMITTED THAT THE DETAILS OF MACHINES AS REFLECTED IN PAGE NO. 7 ARE ESSENTIAL AND NECESSARY FOR THE BUSINESS INVOLVING THE ASSESSEE. FURTHER HE SUBMITS THE WHOLE EXPENDITURE INCURRED UNDER THE HEAD TRAVELLING EXPENSES WAS TOWARDS BUSINESS PURPOSE AND THE ASSESSING OFFICER AND THE LD. CIT(A) ERRED IN HOLDING THE IMPUGNED AMOUNT WAS INCURRED FOR PERSONAL PURPOSE AND SUBMITTED THAT THE SAID EXPENDITURE IS ALLOWABLE. 4. IT IS NOTED THAT ACCORDING TO THE ASSESSING OFFICER THAT ON PERUSAL OF THE DETAILS SUBMITTED THE SAID PAYMENT WAS INCURRED TO CLUB MAHINDRA HOLIDAYS PVT. LTD. AND THE LD. CIT(A) HELD THAT THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE TO THE EFFECT THAT THEY REALLY ATTENDED THE EXHIBITION. BEFORE US ALSO, EXCEPT FILING THE E- MAIL CORRESPONDENCES BETWEEN THE ZONAL SALES MANAGER OF M/S. BOBST INDIA LTD, LOCATED IN BANGLADESH AND INDIAN SHOWING DETAILS OF MACHINES, NO SUCH CONCRETE EVIDENCE WAS PRODUCED TO SUBSTANTIATE THE TRAVEL TO ATTEND THE EXHIBITION IN CHINA BY THE REPRESENTATIVES OF THE ASSESSEE. THE DOCUMENTS WHICH ARE AT PAGES 5, 6 & 7 OF THE PAPER BOOK WERE FILED BEFORE THE ASSESSING OFFICER AND THE LD. CIT(A) AND BOTH THE AUTHORITIES HELD THAT THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE THAT THEY REALLY PARTICIPATED IN THE EXHIBITION AS WAS REFLECTED IN THE E-MAIL CORRESPONDENCE BETWEEN THE SALES MANAGER AND THE PERSONS CONCERNED OF THE ASSESSEE FIRM. THEREFORE, IN THE ABSENCE OF ANY EVIDENCE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND IT IS JUSTIFIED. THUS, GROUND NO. 1, RAISED BY THE ASSESSEE IS DISMISSED. 5. GROUND NO. 2, IS RELATING TO CONFIRMATION OF ADDITION OF PAYMENT OF ROAD TAXES FOR CAR BEARING NO. WB-02Z-9651, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. HEARD BOTH PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE DEBITED AN AMOUNT OF RS.40,070/-, UNDER THE HEAD CAR RUNNING AND MAINTENANCE. ACCORDING TO THE ASSESSING OFFICER, AS PER THE DETAILS PRODUCED BY THE ASSESSEE THAT THE IMPUGNED AMOUNT WAS INCURRED TOWARDS PAYMENT OF ROAD TAXES FOR A CAR WHICH 3 I.T.A. NO. 1251/KOL/2018 ASSESSMENT YEAR: 2014-15 M/S. MANISHA CREATIONS IS NOT IN USE FOR BUSINESS PURPOSE. THE LD. CIT(A) IN HIS ORDER NOTED THAT THIS EXPENDITURE WAS NOT PART OF PROFIT AND LOSS ACCOUNT IN THE IMMEDIATE PRECEDING YEAR AND A MOTOR CAR WAS ALREADY IN EXISTENCE FOR THE YEAR ENDING 31/03/2011, UNDER THE HEAD FIXED ASSETS. ACCORDING TO THE LD. CIT(A), THE ONUS IS ON THE ASSESSEE TO PROVE THAT THE SAID CAR WAS IN USE FOR THE PURPOSE OF BUSINESS AND HELD THAT THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE BEFORE THE ASSESSING OFFICER NOR BEFORE HIM TO THAT EFFECT. BEFORE US, IT IS NOTED THAT THE LD. A/R REFERRED TO PAGE NOS. 9, 10 & 11 OF THE PAPER BOOK THAT PAGE NO. 9 REFERS TO A LEDGER ACCOUNT IN RESPECT OF CAR RUNNING AND MAINTENANCE WHICH CLEARLY SHOWS PARTICULARS OF PAYMENTS IN CASH TOWARDS ROAD TAXE FOR CAR BEARING NO. WB-02Z-9651 WHICH IS IN USE FOR FIVE YEARS. PAGE NO. 10 IS A RECEIPT ISSUED BY THE GOVERNMENT OF WEST BENGAL, ACKNOWLEDGING THE SAME. PAGE NO. 11 REFERS TO REGISTRATION CERTIFICATE ISSUED UNDER THE MOTOR VEHICLES ACT OF GOVERNMENT OF WEST BENGAL, WHICH SHOWS THAT THE SAID CAR WAS REGISTERED IN THE NAME OF THE ASSESSEE. 7. THE OBJECTION OF BOTH THE AUTHORITIES BELOW WAS THAT THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE THAT THE SAID CAR WAS REALLY USED FOR BUSINESS PURPOSE. IN THIS REGARD THE CONTENTION OF THE LD. A/R IS THAT THE SAID CAR WAS REFLECTED IN THE BALANCE SHEET AND DEPRECIATION AND EXPENDITURE HAS BEEN ALLOWED. THE LD. D/R DID NOT CONTROVERT THE SAME. THEREFORE, WE FIND FORCE IN THIS ARGUMENT. THUS, THE ORDER OF THE LD. CIT(A) IS NOT JUSTIFIED AND THE ADDITION CONFIRMED BY THE LD. CIT(A) IS DELETED. ACCORDINGLY GROUND NO. 2 RAISED BY THE ASSESSEE IS DISMISSED. 8. GROUND NO. 3, IS RELATING TO AN ADDITION MADE ON THE BASIS OF ESTIMATION UNDER THE HEAD GENERAL EXPENSES. 9. HEARD BOTH PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOTED THAT THE ASSESSEE DEBITED AN AMOUNT OF RS.5,90,583/- UNDER THE HEAD GENERAL EXPENSES. IN THE ABSENCE OF SUPPORTING EVIDENCE, THE ASSESSING OFFICER HELD THAT THE DETAILS OF THE GENERAL EXPENSES WERE NOT VERIFIABLE AND DISALLOWED 10% TO AN EXTENT OF RS.59,058/-. THE LD. CIT(A) IN HIS ORDER CONFIRMED THE VIEW OF THE ASSESSING OFFICER. THE CONTENTION OF THE LD. A/R WAS THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PACKAGES AND THE SAID GENERAL EXPENSES INCURRED TO MANAGE THE DAY TO DAY AFFAIRS OF THE ASSESSEE. THEREFORE, IN OUR OPINION, 5% OF DISALLOWANCE IS 4 I.T.A. NO. 1251/KOL/2018 ASSESSMENT YEAR: 2014-15 M/S. MANISHA CREATIONS REASONABLE AND ACCORDINGLY WE DIRECT THE ASSESSING OFFICER TO DISALLOW 5% OF THE TOTAL EXPENDITURE INCURRED UNDER THE HEAD GENERAL EXPENSES. WE FIND THAT THE ORDER OF THE LD. CIT(A) ON THIS ISSUE IS NOT JUSTIFIED AND SET ASIDE THE SAME. ACCORDINGLY GROUND NO. 3, RAISED BY THE ASSESSEE IS ALLOWED TO THE EXTENT DIRECTED ABOVE. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. KOLKATA, THE 15 TH DAY OF MARCH, 2019. SD/- SD/- [P.M. JAGTAP] [ S.S. VISWANETHRA RAVI ] VICE PRESIDENT JUDICIAL MEMBER DATED : 15.03.2019 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. M/S. MANISHA CREATIONS 103/24/1, FORESHORE ROAD BINANI METAL COMPLEX HOWRAH 711 102 2. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-48, KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES