M/s. ITKTS Interactive Technologies Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 2248/DEL/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0485 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 13-04-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S N MEENA SR DR
• Keywords: Business expenditure
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI ! !! ! ! !! !#$% #$% #$% #$% & & & & ' ' ' ' BEFORE MS. SUSHMA CHOWLA, JM & SH. N.K.BILLAIYA, AM ! !! ! / ITA NO.2248/DEL/2017 (( (( (( (( / ASSESSMENT YEAR 2012-13 M/S. ITKTS INTERACTIVE TECHNOLOGIES PVT.LTD., 13, INSTITUTIONAL AREA, LODHI ROAD, NEW DELHI-110016. PAN-AABCI5926R .......... )* /APPELLANT VS THE DCIT, CIRCLE-12(2), NEW DELHI. . +,)* / RESPONDENT )*-. / APPELLANT BY : SH. ANKIT AGRAWAL, CA +,)*-. / RESPONDENT BY : SH. S.N.MEENA, SR.DR -/0& / DATE OF HEARING : 18.12.2019 12-/0& / DATE OF PRONOUNCEMENT: 23.12.2019 / ORDER PER SUSHMA CHOWLA, JM: THE APPEAL FILED BY ASSESSEE IS AGAINST THE ORDER O F CIT(A)-35, NEW DELHI, DATED 05.09.2016 RELATING TO ASSESSMENT YEAR 2012-13 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ISSUE ARISING IN THE PRESENT APPEAL AGAINST THE DISALLOWANCE OF FOREIGN TRAVEL EXPENSES TO THE TUNE OF RS.6,00,010/ -. 2 ITA NO.2248/DEL/2017 ASSESSMENT YEAR- 2012-13 3. BRIEFLY IN THE FACTS OF THE CASE THE ASSESSEE HA D INCURRED FOREIGN TRAVEL EXPENSES TOTALING TO RS.8,00,013/-. THE ASS ESSEE WAS ENGAGED IN THE BUSINESS OF SELLING TICKETS OF VARIOUS EVENTS O F SPORTS AND ENTERTAINMENT INDUSTRY THROUGH ITS ONLINE PORTAL K YAZOONGA.COM. THE DIRECTOR OF THE ASSESSEE, MS. NEETU BHATIA HAD TRAV ELLED TO RIO WHERE AN EVENT WAS ORGANIZED BY DELL WOMENS ENTREPRENEUR NE TWORK, WHEREIN SHE WAS A PANELIST AND SPEAKER. FURTHER, EXPENDITURE W AS INCURRED ON TRIP TO NEW YORK BY BOTH THE DIRECTORS I.E. MS. NEETU BHATI A AND MS. ARPITA MAJUMDAR AND IT WAS CLAIMED THAT THE SAID TRIP WAS TO MEET WITH THE PARENT COMPANY IN NEW YORK. TOTAL EXPENDITURE ON B OTH TRIPS WAS RS.8,00,013/-. THE ASSESSING OFFICER DISALLOWED TH E CLAIM OF THE ASSESSEE IN ENTIRETY VIDE PARA 5 OF THE ASSESSMENT ORDER HOL DING THAT THE ASSESSEE HAD NOT FULFILLED THE CONDITIONS LAID DOWN U/S 37(1 ) OF THE ACT. THE CIT(A) ALLOWED THE CLAIM TO THE EXTENT OF RS.3 LAKHS AND C ONFIRMED THE DISALLOWANCE OF RS.6,00,010/-, AGAINST THE ASSESSEE IN APPEAL. 4. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT BOT H TRIPS UNDERTAKEN BY THE DIRECTORS OF THE ASSESSEE WERE FOR PROMOTION OF THEIR BUSINESS AND THE SAME MERITS TO BE ALLOWED AS BUSINESS EXPENDITU RE IN THE HANDS OF THE ASSESSEE. 5. THE LD.DR FOR THE REVENUE ON THE OTHER HAND PLAC ED STRONG RELIANCE ON THE ORDERS OF AUTHORITY BELOW AND STATED THAT IN THE ABSENCE OF THE ASSESSEE ESTABLISHING THAT THE EXPENDITURE HAD BEEN INCURRED FOR THE PURPOSE OF BUSINESS, THE SAME COULD NOT BE ALLOWED AS AN EXPENDITURE. 3 ITA NO.2248/DEL/2017 ASSESSMENT YEAR- 2012-13 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE COMPANY CONSTITUTES OF THE TWO DIRECTORS I .E. MS. NEETU BHATIA AND MS. ARPITA MAJUMDAR. THE ASSESSEE IS ENGAGED I N THE BUSINESS OF PROVIDING E-COMMERCE PORTAL FOR SPORTING EVENTS TIC KETS AND FOR ENTERTAINMENT INDUSTRY. THE DIRECTOR, MS. NEETU BH ATIA WAS INVITED AS A PANELIST AND AS A SPEAKER ON A NETWORK EVENT ORGANI ZED BY DELL WOMENS ENTREPRENEUR. THIS EVENT WAS ATTENDED BY VARIOUS PR OMINENT FEMALE FOUNDERS, CEOS AND OTHER INNOVATIVE LEADERS . THE ASSESSEE CLAIMS THAT THE ATTENDANCE OF THE EVENT GIVES GLOBA L RECOGNITION TO THE ASSESSEE. FURTHER, THE ASSESSEE HAD ALSO FILED SUP PORTING EVIDENCES IN THIS REGARD. SUCH AN EXPENDITURE IS FOR THE FURTHE RANCE OF THE ASSESSEE AND NEEDS TO BE ALLOWED IN ENTIRETY IN THE HANDS OF THE ASSESSEE. THE TOTAL EXPENDITURE INCURRED IN THE TRIP OF RIO IS RS .2,67,561/-. 7. NOW COMING TO THE NEXT TRIP WHICH IS TO NEW YORK BY BOTH THE DIRECTORS I.E. MS. NEETU BHATIA OF RS.4,15,939/- AN D MS. ARPITA MAJUMDAR OF RS.1,16,513/-. THE EXPLANATION OF THE ASSESSE E IS THAT THE SAID TRIP WAS MADE IN ORDER TO MEET WITH THE HOLDING COMPANY IN NEW YORK. WE FIND MERIT IN THE PLEA OF THE ASSESSEE THAT THE SAI D EXPENDITURE IS AN ALLOWABLE BUSINESS EXPENDITURE. BUT WHEN WE COMPAR E THE EXPENDITURE INCURRED ON TWO DIRECTORS, WE FIND THAT THE EXPENDI TURE INCURRED ON MS. NEETU BHATIA IS MUCH HIGHER THAN EXPENDITURE INCURR ED ON MS. ARPITA MAJUMDAR. NO PLAUSIBLE EXPLANATION WAS GIVEN BY TH E ASSESSEE IN THIS 4 ITA NO.2248/DEL/2017 ASSESSMENT YEAR- 2012-13 REGARD, ACCORDINGLY WE RESTRICT THE DISALLOWANCE OF RS.1 LAKH OUT OF FOREIGN TRAVELLING EXPENSES. 8. IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD DAY OF DECEMBER, 2019. SD/- SD/- (N.K.BILLAIYA) (SUS HMA CHOWLA) & & & & /ACCOUNTANT MEMBER /JUDICIAL MEMBER / DATED : 23 RD DECEMBER, 2019 . * AMIT KUMAR * -+/#4#/5 COPY OF THE ORDER IS FORWARDED TO : 1. )* / THE APPELLANT 2. +,)* / THE RESPONDENT 3. 6 7 8 / THE CIT(A) 4. 9 6 / THE PR. CIT 5. 6. #:;+/ / DR, ITAT, DELHI ;<(=5 GUARD FILE. / BY ORDER , ,#/+/ // TRUE COPY // ?@A , ASSISTANT REGISTRAR, ITAT, DELHI