Farida Classic Shoes Pvt Ltd., CHENNAI V. DCIT, CHENNAI

ITA 1792/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96451 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 07-08-2015
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Assessee Lawyers: H B MEERA SHENOY

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL A BENCH, CHE NNAI . , ! ' . #$ , % & BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NO.1792/MDS./2015 ( / ASSESSMENT YEAR :2012-13) M/S.FARIDA CLASSIC SHOES P. LTD., 151/4,MOUNT POONAMALLEE ROAD, RAMAPURAM, CHENNAI 600 089. VS. DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-II(I), CHENNAI. PAN AAACF 0451 B ( '( / APPELLANT ) ( )*'( / RESPONDENT ) / APPELLANT BY : MS.H.B.MEERA SHENOY, FCA / RESPONDENT BY : MR.A.B.KOLI, JCIT, D.R / DATE OF HEARING : 30.09.2015 /DATE OF PRONOUNCEMENT : 20.11.2015 + / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED B Y THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-6, CHENNA I DATED ITA NO. 1792/MDS/2015 2 08.06.2015 IN ITA NO.238/CIT(A)-6/2014-15 PASSED U NDER SEC.143(3) READ WITH SECTION SEC. 250 OF THE ACT. 2. THE ASSESSEE HAS RAISED FOUR ELABORATE GROUNDS IN ITS APPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE LD. CIT (A), WHO HAD UPHELD THE OR DER OF THE LD. ASSESSING OFFICER FOR DISALLOWING 25% OF THE FOREIG N TRAVEL EXPENSES AMOUNTING TO ` 3,75,212/-. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A COMPANY, ENGAGED IN THE BUSINESS OF MANUFACTURING AND EXPORT ING OF SHOES AND SHOE UPPER, FILED ITS RETURN FOR THE ASSESSMEN T YEAR 2012-13 ON 18.09.2012 ADMITTING TOTAL INCOME AS ` 3,24,74,400/- UNDER NORMAL PROVISION AND ` 3,46,04,690/- UNDER MAT. SUBSEQUENTLY, THE CASE WAS TAKEN UP FOR SCRUTINY AND THE ASSESSMENT WAS COMPLE TED ON 16.01.2015 WHEREIN THE LD.A.O DISALLOWED 25% ON THE OVERSEAS TRAVEL EXPENSES OF ` 15,02,047/- UNDERTAKEN BY THE DIRECTOR, MR.IQBAL AHMED MECCA. THE ASSESSEE HAD FURNISHED EVIDENCE FO R THE ITA NO. 1792/MDS/2015 3 PURCHASE OF FOREIGN EXCHANGE MADE BY THE DIRECTOR O F THE COMPANY, HOWEVER DID NOT FURNISH ANY OTHER EVIDENCE FOR THE EXPENSES INCURRED. THEREFORE, THE LD. ASSESSING OFFICER DIS ALLOWED 25% OF THE EXPENSES INCURRED BY THE ASSESSEE IN FOREIGN EXCHAN GE. ON APPEAL, THE LD. CIT (A) CONFIRMED THE ORDER OF THE LD. ASSE SSING OFFICER BY STATING THAT THE ASSESSEE HAD AGREED FOR THE DISALL OWANCE OF 25% OF THE FOREIGN EXCHANGE PURCHASED. 4. BEFORE US, THE LD. A.R. SUBMITTED THAT THE ASSE SSEE HAD NOT AGREED FOR THE ADDITION EITHER BEFORE THE LD. ASSES SING OFFICER OR BEFORE THE LD. CIT (A). INSTEAD IT WAS ARGUED BEFOR E THE REVENUE THAT THE OVERSEAS EXPENSE INCURRED BY THE ASSESSEE WAS G ENUINE AND DEDUCTION MAY BE GRANTED FOR THE SAME. LD. A.R. FU RTHER SUBMITTED BEFORE US THAT LD. ASSESSING OFFICER AND THE LD. CI T (A) HAD SIMPLY REJECTED THE SUBMISSIONS MADE BEFORE THEM AND MADE THE ADDITION ON AN ADHOC BASIS. LD. D.R ON THE OTHER HAND ARGUED IN SUPPORT OF THE ORDERS OF THE REVENUE. ITA NO. 1792/MDS/2015 4 5. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PER USED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF TH E CASE, IT IS APPARENT THAT BOTH THE LD. ASSESSING OFFICER AND TH E LD. CIT (A) HAS NOT DOUBTED THE GENUINENESS OF THE EXPENDITURE. THE Y HAVE MADE THE ADDITION AND SUSTAINED THE SAME, ONLY FOR THE REASO N THAT VOUCHERS FOR EACH OF THE EXPENDITURE INCURRED WERE NOT FURNI SHED BEFORE THEM, THOUGH EVIDENCES WERE PRODUCED FOR PURCHASE OF FORE IGN EXCHANGE. CONSIDERING THE FACTS AND CIRCUMSTANCE OF THE CASE, THE NATURE OF THE BUSINESS OF THE ASSESSEE AND THE INCOME GENERATED B Y THE ASSESSEE, WE ARE OF THE CONSIDERED VIEW THAT THE EX PENSES INCURRED BY THE ASSESSEE TO THE TUNE OF ` 15,02,047/- TOWARDS OVERSEAS TRAVELS IS QUIET REASONABLE. MOREOVER IT IS EVIDENT THAT TH E ASSESSEE HAD PURCHASED THE FOREIGN CURRENCY AND NO PORTION OF TH E SAME IS SURRENDERED. FROM THE MEAGER AMOUNT OF ` 15,02,047/- INCURRED TOWARDS FOREIGN TRAVEL EXPENDITURE IT CANNOT BE PRE SUMED THAT ANY SIGNIFICANT AMOUNT WOULD HAVE BEEN SPENT FOR PERSON AL PURPOSE. THEREFORE, WE HEREBY DIRECT THE LD. ASSESSING OFFIC ER TO DELETE THE ADDITION MADE FOR ` 3,75,512/- TOWARDS DISALLOWANCE OF FOREIGN TRAVEL EXPENSES. ITA NO. 1792/MDS/2015 5 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . ORDER PRONOUNCED ON 20 TH NOVEMBER, 2015 AT CHENNAI. SD/- SD /- ( ! ' . #$ ) ( DUVVURU RL REDDY ) ( . ) ( A.MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 20 TH NOVEMBER, 2015 . K S SUNDARAM. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE