M/s. Karishama Mosaics Pvt.Ltd., Ahmedabad V. The Income tax Officer.Ward-4(2), Ahmedabad

ITA 1861/AHD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6876 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 01-04-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 31-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHELLEY JINDAL
• Assessee Lawyers: PRAMOD KEDIA

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE S/SHRI D.K. TYAGI, JM AND D.C.AGRAWAL, AM M/S KARISHMA MOSAICS (P) LTD., 412, SAMAAN-II, OPP. RELIANCE PETROL PUMP, ANAND NAGAR ROAD, AHMEDABAD-380051. VS. ITO, WARD 4(2), AHMEDABAD. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI PRAMOD KEDIA, AR RESPONDENT BY:- SHRI SHELLEY JINDAL, CIT, DR O R D E R PER D.C. AGRAWAL, ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE ASSESSEE RAISING FO LLOWING GROUND:- (1) ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS.1 ,35,901/- TOWARDS TRAVELING EXPENSES OVERLOOKING THE SUBMISSI ONS TENDERED DURING THE COURSE OF APPELLATE HEARING. 2. THE ONLY ISSUE INVOLVED IN THE APPEAL IS DISALLO WANCE OF RS.1,35,901/- OUT OF FOREIGN TRAVEL EXPENSES INCURR ED IN RESPECT OF ONE SHRI AMIT JUVEKAR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO FOUND THAT ASSESSEE HAS CLAIMED FOREIGN TRAVELING E XPENSES OF RS.1,35,901/- IN RESPECT OF ONE SHRI AMIT JUVEKAR. THE CASE OF THE ASSESSEE WAS THAT SHRI AMIT JUVEKAR IS A TECHNICAL PERSON WORKING WITH M/S PALLADIO GLASS LTD., A SISTER CONCERN OF THE AS SESSEE. THE DIRECTOR OF ITA NO.1861/AHD/2010 ASST. YEAR 2006-07 ITA NO.1861/AHD/2010 ASST. YEAR2006-07 2 THE ASSESSEE COMPANY NAMELY MR. PAWAN PODDAR PARTIC IPATED IN AN EXHIBITION IN ITALY ORGANIZED BY M/S TREGEMELLI S.R .1., ITALY IN RESPECT OF GLASS TECHNOLOGY. SINCE THERE WAS NO TECHNICAL PERS ON WITH ASSESSEE COMPANY IT HIRED SHRI AMIT JUVEKAR FROM THE SISTER CONCERN AND TOOK HIM TO ITALY. THE AO, HOWEVER, WAS OF THE VIEW THAT SHR I JUVEKAR WAS NOT AN EMPLOYEE OF THE ASSESSEE COMPANY AND IT WAS NOT PRO VED THAT HIS GOING TO ITALY IS ESSENTIAL AND WITHOUT HIM IT IS NOT POSSIB LE FOR THE ASSESSEE TO ATTEND THE EXHIBITION. THE AO MENTIONED THAT ASSESS EE COMPANY HAS A PRESIDENT MARKETING LOOKING AFTER THE SALES AND COL LECTION FOR THE COMPANY ABROAD. ACCORDINGLY, THE AO DISALLOWED THE CLAIM OF FOREIGN TRAVELING EXPENSES IN RESPECT OF SHRI AMIT JUVEKAR. 3. THE LD. CIT(A) CONFIRMED THE ADDITION FOR SIMILA R REASONS. 4. BEFORE US, THE LD. AR FOR THE ASSESSEE SUBMITTED THAT ASSESSEE HAS SUBMITTED SEVERAL DOCUMENTS TO SHOW THAT SHRI AMIT JUVEKAR WAS TAKEN TO ITALY FOR THE BUSINESS PURPOSES OF THE ASSESSEE COM PANY. OTHER REASONS ARE THAT - (1) ASSESSEE COMPANY DID NOT HAVE ITS OWN EMPLOYEES . (2) ASSESSEE COMPANY IS GETTING INFRASTRUCTURE AND LOGISTIC SUPPORT FROM M/S PALLADIO GLASS LTD. AND, THEREFORE, THAT S ISTER CONCERN HAD PROVIDED TECHNICAL ASSISTANCE TO THE ASSESSEE COMPA NY FOR UNDERSTANDING THE TECHNICAL ASPECTS IN THE EXHIBITION. NO SUCH TE CHNICAL PERSON OF THE CALIBER OF SHRI AMIT JUVEKAR IS EMPLOYED BY THE ASS ESSEE. (3) THE STALL IN ITALY IS BOOKED IN THE NAME OF SHR I AMIT JUVEKAR AND IN SUPPORT OF THIS, A FAX MESSAGE WAS FILED. 5. THE LD. AR SUBMITTED THAT AUTHORITIES HAVE NOT C ONSIDERED THE ABOVE FACTS AND INFERRED THAT THERE WAS NO BUSINESS CONNECTION IN TAKING SHRI AMIT JUVEKAR TO ITALY. ITA NO.1861/AHD/2010 ASST. YEAR2006-07 3 6. THE LD. DR ON THE OTHER HAND SUPPORTED THE ORDER S OF AUTHORITIES BELOW. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW THE AO IS REQUIRE D TO CONSIDER ABOVE EVIDENCE SUBMITTED BY THE ASSESSEE BEFORE COMING TO THE CONCLUSION THAT THE FOREIGN TRAVELING OF SHRI AMIT JUVEKAR WAS NOT FOR THE BUSINESS PURPOSES OF THE ASSESSEE COMPANY. THE AO WILL GIVE AN OPPORTUNITY TO PROVE THAT HOW M/S PALLADIO GLASS LTD. IS PROVIDING INFRASTRUCTURE AND LOGISTIC SUPPORT. WHAT IS THE AGREEMENT BETWEEN THE TWO. WHAT IS THE PAYMENT ASSESSEE COMPANY IS MAKING FOR RECEIVING SU CH INFRASTRUCTURE AND LOGISTIC SUPPORT IN ASST. YEAR 2006-07. HOW MAN Y EMPLOYEES ARE WORKING WITH ASSESSEE COMPANY AND WHAT IS THE SALAR Y PAID TO THEM AND WHAT IS THEIR QUALIFICATIONS AND JOB PROFILE. WHETH ER THERE IS ANY PERSONS EMPLOYED BY THE ASSESSEE COMPANY WHO HAS TECHNICAL KNOWLEDGE OF THE GLASS INDUSTRY. WHAT IS THE QUALIFICATION OF SHRI A MIT JUVEKAR AND HOW IT IS SUPERIOR TO THE EMPLOYEES EMPLOYED BY THE ASSESS EE COMPANY. WHETHER THERE WAS ANY FORMAL REQUEST BY THE ASSESSEE COMPAN Y TO M/S PALLADIO GLASS LTD. FOR SENDING HIS TECHNICAL TEAM/PERSONNEL TO THE EXHIBITION. WHAT IS THE BUSINESS ASSESSEE HAS ACQUIRED IN ATTEN DING THE EXHIBITION AND WHAT ASSISTANCE SHRI AMIT JUVEKAR HAS RENDERED TO T HE ASSESSEE COMPANY BY ATTENDING THE EXHIBITION AND WHETHER ANY SUCH BU SINESS PURPOSE IS ALSO SERVED BY THE TRAVELING OF SHRI AMIT JUVEKAR, TO M/ S PALLADIO GLASS LTD. IF BUSINESS PURPOSE OF BOTH THE COMPANIES ARE SERVE D BY THE VISIT OF SHRI AMIT JUVEKAR TO ITALY THEN REASONABLE AMOUNT OF THE EXPENDITURE SO INCURRED SHOULD BE CONSIDERED AS BELONGING TO M/S P ALLADIO GLASS LTD. WITH THE ABOVE DIRECTION WE RESTORE THE MATTER BACK TO THE FILE OF AO FOR DECIDING THE ISSUE AFRESH AFTER GIVING AN OPPORTUNI TY OF BEING HEARD TO THE ITA NO.1861/AHD/2010 ASST. YEAR2006-07 4 ASSESSEE. AS A RESULT, THE APPEAL FILED BY THE ASSE SSEE IS ALLOWED BUT FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED BUT FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN OPEN COURT ON 8/4/11. SD/- SD/- (D. K. TYAGI) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMB ER AHMEDABAD, DATED : 8/4/11. MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD 1.DATE OF DICTATION 1/4/2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 6/4/ 2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..