ITO, Ward - 7(1), Kolkata, Kolkata V. Neozone Traders (P) Ltd., Kolkata

ITA 2124/KOL/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75030 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2014
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 25-11-2010
• Court: TRIBUNAL
• Department Lawyers: SADHAN BHATTACHARYA
• Assessee Lawyers: D S DAMLE
• Keywords: Business expenditure
• Section: 143(3)

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE , /AND . . . . ' '' ''# '#'# '#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 2124/KOL/2010 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2004-05 INCOME-TAX OFFICER, WD-7(1), KOLKATA. VS. NEOZONE TRADERS (P) LTD. (PAN:AABCN0682M) (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING: 09.01.2014 DATE OF PRONOUNCEMENT: 27.01.2014 FOR THE APPELLANT: SHRI SADHAN BHATTACHARYA, ADDL. CIT, SR. DR FOR THE RESPONDENT: SHRI D. S. DAMLE $0 / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A), CENTRAL-II, KOLKATA IN APPEAL NO.206/CC-XIII/CIT(A)-C-II/KOL/06-07 DATED 06.09.20 10. ASSESSMENT WAS FRAMED BY DY. CIT, CC-XIII, KOLKATA U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2004-05 VIDE HIS ORDER DA TED 27.11.2006. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) IN DELETING THE DISALLOWANCE OF FOREIGN TRAVEL EXPENSES OF RS.15,39 ,730/-. 3. BRIEFLY STATED FACTS LEADING TO THE ABOVE ISSUE ARE THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED FROM THE DETAILS OF FOREIGN TRAVEL EXPENSES INCURRED BY DIRECTOR OF THE COMPANY THAT THESE ARE NOT FOR THE PURPOSE O F BUSINESS. ACCORDING TO AO, FOR UNDERTAKING FOREIGN TRAVEL EXPLORING FOREIGN MARKET S FOR IMPORTED GOODS IS NOT A BUSINESS ACTIVITY OF THE ASSESSEE COMPANY. ACCORDINGLY, HE DISALLOWED THIS FOREIGN TRAVEL EXPENDITURE OF RS.15,39,730/-. AGGRIEVED, ASSESSEE PREFERRED A PPEAL BEFORE CIT(A), WHO RELYING ON THE EARLIER YEARS DECISION ALLOWED THE CLAIM OF THE AS SESSEE BY OBSERVING IN PARA 4 AS UNDER: 4. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND SU BMISSIONS OF APPELLANT. ASSESSING OFFICER HAS STATED IN THE ASSESSMENT ORDER THAT THE DISALLOWANCE OF FOREIGN TRAVEL HAS BEEN MADE BY HIM BECAUSE SIMILAR DISALLOWANCES WERE MADE BY THE ASSESSING OFFICER IN EARLIER ASSESSMENT YEARS. IN ASSESSMENT YEAR 2002- 03 A SIMILAR DISALLOWANCE OF FOREIGN TRAVEL EXPENDITURE WAS DELETED BY MY PREDECESSOR IN APPELLATE ORDER DATED 29.03.2007 IN APPEAL NO.8CC-XIII/CIT(A)C-II/05-06 AND THE SAME OR DER WAS FOLLOWED IN ASSESSMENT YEAR 2003-04 IN APPELLATE ORDER DATED 29.03.2007 IN APPEAL NO. 12/CC-XIII/CIT(A)C- II/06-07. THEREFORE, FOLLOWING THE ORDERS OF MY PR EDECESSOR, I DIRECT THE ASSESSING OFFICER TO ALLOW THE FOREIGN TRAVEL EXPENDITURE OF RS.15,39,730/- AS BUSINESS EXPENDITURE AND REDUCE THE TOTAL INCOME OF THE APPELLANT ACCORD INGLY. 2 ITA NO. 2124/K/2010 NEOZONE TRADERS (P) LTD , AY:2004-05 AGGRIEVED, REVENUE CAME IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSEE UNDERTOOK FOREIGN TRAVEL FOR EXPLORING FOREIGN MARKET FOR IMPORTED GOODS AS PER THE LIBERALISED EXIM POLICY, GOVT. OF INDIA. THE ASSESSEE WAS IN THE PROCESS OF IMPORTING AND EXPORTING OF CONSUMER GOODS AND ALSO TO OBTAIN IMPORT EXPORT CODE NO. FROM THE JOINT DIRECTOR GENERAL OF FOREIGN TRADE. IN VIEW O F THIS, THE ASSESSEE COMPANYS DIRECTOR HAD UNDERTAKEN VISITS TO MIDDLE EAST AND EUROPEAN COUNT RIES TO LOCATE THE SOURCE OF CONSUMER GOODS AT A COMPETITIVE RATE. IT WAS THE CLAIM OF T HE ASSESSEE BEFORE THE AO AS WELL AS CIT(A) THAT IN VIEW OF THE ABOVE REASONS IN ORDER TO EXPLO RE THE NEW POSSIBILITIES IN ITS TRADING BUSINESS HAD INCURRED FOREIGN TRAVEL EXPENSES, WHICH IS FOR THE PURPOSE OF BUSINESS ONLY. EVEN IN THE EARLIER YEAR SIMILAR DISALLOWANCE WAS DELETED AND T HE SAME HAS BEEN ACCEPTED BY REVENUE. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE CONFI RM THE ORDER OF CIT(A) DELETING THE DISALLOWANCE. APPEAL OF REVENUE IS DISMISSED. 5. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 6. ORDER IS PRONOUNCED IN THE OPEN COURT ON 27.01.2 014 SD/- SD/- . . . . ' '' ''# '#'# '# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 27TH JANUARY, 2013 12 '3' 4 JD.(SR.P.S.) $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT ITO, WARD-7(1), KOLKATA 2 ./,- / RESPONDENT NEOZONE TRADERS (P) LTD., 216, A. J. C. BOSE ROAD, KOLKATA-17 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .