Vimal Dairy Ltd., Ahmedabad V. DCIT, Circle-4 (1) (2), Ahmedabad

ITA 1752/AHD/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6179 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 30-09-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 18-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALIT P JAIN
• Assessee Lawyers: BIREN SHAH
• Keywords: Difference of opinion
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 1752/AHD/2017 (ASSESSMENT YEAR: 2010-11) VIMAL DAIRY LTD. 5, SAKET INDUSTRIAL ESTATE, VIII- MORAIYA NR. CHANGODAR, TA SANAND, DIST: AHMEDABAD V/S DCIT, CIRCLE-4(1)(2), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AABCV 5434B APPELLANT BY : SHRI BIREN SHAH, AR RESPONDENT BY : SHRI LALIT P. JAIN, SR. D.R. ( )/ ORDER DATE OF HEARING : 30 -09-201 9 DATE OF PRONOUNCEMENT : 09 -10-2019 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A)-8, AHMEDABAD DATED 30.06.2017 PERTAINING TO A.Y. 2010-11 AGAINST THE ITA NO. 1752 /AHD/2017 . A.Y. 2010-1 1 2 CONFIRMING PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) RELATING TO DISALLOWANCE OF FOREIGN TRAVEL EXPENSES. 2. FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER AT PARA 6 OF HIS ORDER HAS OBSERVED THAT THE ASSESSEE COMPANY HAS CLAIMED FORE IGN TRAVEL EXPENDITURE OF RS. 2,38,675/- INCURRED BY ONE OF THE COMPANYS EMP LOYEE MR. PRADIP C. PATEL. IT WAS FURTHER OBSERVED THAT ASSESSEE HAS NOT SUBMI TTED THE PURPOSE AND PROOF THAT SUCH FOREIGN TOUR WAS UNDERTAKEN FOR THE PURPO SE OF BUSINESS. IN CASE CASE, ASSESSEE FILED REPLY DATED 4.12.2012 WHEREIN DETAIL ED EXPLANATION WAS OFFERED. HOWEVER, THE EXPLANATION OFFERED BY THE ASSESSEE CO ULD NOT CONVINCE. THE LD. ASSESSING OFFICER AND EXPENSES OF RS. 2,38,675/- WA S DISALLOWED AND SUBSEQUENTLY INITIATED PENALTY PROCEEDINGS U/S 271( 1)(C) OF THE ACT. 3. AGAINST THE PENALTY ORDER, ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A) WHO CONFIRMED THE ACTION OF THE ASSESSING OFFICER. ON T HE GROUND THAT APPELLANT HAS ONLY PRESENTED SIMPLE NARRATION REGARDING THE J OURNEY MADE BY ONE OF THE EMPLOYEE TO SOUTH AFRICA AND HAS NOT GIVEN ANY EVID ENCE REGARDING FOREIGN TRAVEL EXPENSES OF RS. 2,38,675/-. 4. NOW ASSESSEE HAS COME BEFORE US AGAINST THE ORDER O F THE LD. CIT(A) FOR CONFIRMING PENALTY. 5. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMPUGN ED ORDER AND HEARD BOTH THE PARTIES. IN THIS CASE, ONE OF THE EMPLOYEE OF T HE ASSESSEE VISITED SOUTH AFRICA AND EXPENSES WERE BORNE BY THE ASSESSEE COMP ANY AND PURPOSE OF THE SAID VISIT WAS DULY EXPLAINED BY THE ASSESSEE TO LO WER AUTHORITIES. BUT SAME COULD NOT CONVINCE THE LOWER AUTHORITIES. IT IS THE CASE WHERE MANAGING ITA NO. 1752 /AHD/2017 . A.Y. 2010-1 1 3 DIRECTOR OR DIRECTOR OR THEIR FAMILY MEMBER HAVE VI SITED SOUTH AFRICA. ON THE CONTRARY, AN EMPLOYEE OF THE ASSESSEE COMPANY VISIT ED THE FOREIGN COMPANY. IT IS THE PREROGATIVE AND DISCRETION OF THE COMPANY TH AT IN THE INTEREST OF THE BUSINESS EXPEDIENCY SUCH DECISION CAN BE TAKEN BY T HE ASSESSEE COMPANY AND REVENUE CANNOT QUESTION SUCH FOREIGN VISIT PARTICUL ARLY WHEN PURPOSE OF THE FOREIGN VISIT DULY EXPLAINED TO THE LOWER AUTHORITI ES. 6. IN SUPPORT OF ITS CONTENTION, LD. A.R. CITED AN ORD ER OF ITAT LUCKNOW BENCH IN THE MATTER OF ASHOK GRIH UDYOG KENDRA PVT. LTD. VS. ACIT (2009) 120 ITD 151 (LUCKNOW) WHEREIN IN SIMILAR FACTS AND CIRCUMST ANCES, RELIEF WAS GRANTED TO THE ASSESSEE BY THE ITAT AND WITH FOLLOWING OBSERVA TION: SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 - PE NALTY - FOR CONCEALMENT OF INCOME - ASSESSMENT YEAR 2000-01 - FOR RELEVANT ASSESSMENT YEAR, ASSESSEE-COMPANY FILED ITS RETURN WHEREIN IT CLAIME D DEDUCTION OF RS. 2.37 LAKHS AS LTC PAID TO AN EMPLOYEE - ASSESSING OFFICE R REJECTED ASSESSEE'S CLAIM HOLDING THAT AFORESAID EXPENDITURE WAS NOT IN CURRED FOR PURPOSE OF BUSINESS OF ASSESSEE-COMPANY - ASSESSING OFFICER AL SO IMPOSED PENALTY ON ASSESSEE ON ACCOUNT OF CLAIMING WRONG DEDUCTION - COMMISSIONER (APPEALS) CONFIRMED LEVY OF PENALTY - ON INSTANT AP PEAL, IT WAS SEEN THAT REVENUE HAD NOT DOUBTED GENUINENESS OF EXPENDITURE INCURRED AND IT WAS A MERE CASE OF DIFFERENCE OF OPINION BETWEEN ASSESSEE AND DEPARTMENT AS TO WHETHER AMOUNT-IN-QUESTION HAD BEEN INCURRED FOR PU RPOSE OF BUSINESS OR NOT - FURTHERMORE, ASSESSEE'S EXPLANATION IN RESPEC T OF ENTRIES IN BOOKS WAS FOUND TO BE BONA FIDE - WHETHER, ON FACTS, IT C OULD BE CONCLUDED THAT IT WAS ONLY A CASE OF ASSESSEE'S FAILURE TO ESTABLISH ITS CLAIM IN QUANTUM PROCEEDINGS, BUT THAT WOULD NOT AUTOMATICALLY BECOM E A CASE FOR LEVY OF PENALTY FOR CONCEALMENT OF FURNISHING ACCURATE PART ICULARS - HELD, YES - WHETHER, THEREFORE, PENALTY LEVIED BY AUTHORITIES B ELOW WAS TO BE CANCELLED - HELD, YES ITA NO. 1752 /AHD/2017 . A.Y. 2010-1 1 4 7. IN OUR CONSIDERED OPINION, THIS IS FIT CASE WHERE R ELIEF SOUGHT AGAINST IMPOSITION OF PENALTY SHOULD BE GRANTED TO THE ASSESSEE. THUS, APPEAL OF THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN OPEN COURT ON 09- 10- 2019 SD/- SD/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 09 /10/2019 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD