The ACIT, Bhopal V. M/s. People General Hospital Ltd., Bhopal

ITA 240/IND/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2964 (ITAT-INDORE)
• Duration Of Justice: 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-04-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 15-05-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: H P VERMA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER ITA NO.240/IND/2009 A.Y. 2005-06 ASSTT. COMMISSIONER OF INCOME TAX 2(1) BHOPAL APPELLANT VS M/S PEOPLE GENERAL HOSPITAL LIMITED BHOPAL PAN AACCP-0310R RESPONDENT APPELLANT BY : SMT. APARNA KARAN, SR. DR RESPONDENT BY : SHRI H.P. VERMA AND SHRI ASHISH GOYAL O R D E R PER JOGINDER SINGH, JM THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 13.3.2009 ON THE GROUND THAT ON THE FA CTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME-TAX 2 (APPEALS) ERRED IN DELETING THE DISALLOWANCE OF RS .7,14,303/- MADE ON ACCOUNT OF TRAVELLING EXPENSES. 2. DURING HEARING OF THIS APPEAL WE HAVE HEARD SMT. APARNA KARAN, SR. DR AND SHRI H.P. VERMA ALONG WITH SHRI ASHISH G OYAL, LD. COUNSEL FOR THE ASSESSEE. THE CRUX OF ARGUMENTS ON BEHALF O F THE REVENUE IS THAT NECESSARY DETAILS OF CLAIMED TRAVELLING EXPENSES WE RE NOT FURNISHED BY THE ASSESSEE BEFORE THE LEARNED COMMISSIONER OF INC OME TAX (APPEALS). THE ASSESSMENT ORDER WAS STRONGLY DEFEND ED. ON THE OTHER HAND, THOUGH THE LD. COUNSEL FOR THE ASSESSEE DEFEN DED THE IMPUGNED ORDER BUT COULD NOT SUBSTANTIATE THAT THE DETAILS O F TRAVELLING EXPENSES WERE FURNISHED BY THE ASSESSEE AT ANY STAGE. EVEN B EFORE THE TRIBUNAL NO SUCH DETAILS WERE FILED BY THE ASSESSEE. THE FIN DINGS OF THE ASSESSING OFFICER ARE REPRODUCED HEREUNDER :- URING THE YEAR THE ASSESSEE HAS INCURRED EXPENDITURE OF RS. 7,14,303/- ON FOREIGN TRAVEL OF ITS DIRECTOR S.N. VIJAY TO USA. THE PURPOSE OF THE VIS IT IS STATED TO BE MEETING WITH M/S ALLIANCE INDUSTRIES L TD. BUT THE ASSESSEE HAS NOT GIVEN ANY CLARIFICATION AS TO WHY TRAVEL TO USA WAS REQUIRED FOR MEETING WITH ALLIANCE INDUSTRIES LTD. REGISTERED IN GILBRALTAR A ND HAVING MANAGEMENT OFFICE IN UAE. BUSINESS PURPOSE OF THE FOREIGN VISIT NOT HAVING BEEN PROVED THE EXP ENSE IS DISALLOWED. THE DISCUSSION MADE IN THE IMPUGNED ORDER IS ALSO REPRODUCED AS UNDER :- IN THE NEXT GROUND OF APPEAL, THE APPELLANT HAS CHALLENGED THE DISALLOWANCE OF RS.7,14,303/- OUT OF 3 TRAVELLING EXPENSES. IT IS SUBMITTED THAT THE AO H AS MADE THE DISALLOWANCE OF RS. 7,14,303/- OUT OF TOTA L EXPENSES OF RS. 10,90,784/- ON ACCOUNT OF TOUR AND TRAVELS. IT IS SUBMITTED THAT DURING THE YEAR UNDE R CONSIDERATION THE CHAIRMAN OF THE COMPANY MR. SURES H NARAYAN VIJAY HAS VISITED USA AND ON THE SAID VISIT EXPENSES OF RS.7,14,303/- WERE INCURRED. IT IS AVE RRED THAT THE PURPOSE OF VISIT WAS TO MEET THE DIRECTORS OF M/S ALLIANCE INDUSTRIES LIMITED FOR INVESTMENT PURPOSES WHO ARE LIVING IN USA. AS THE VISIT WAS F OR THE PURPOSES OF THE COMPANY ONLY, EXPENSES INCURRED ON THE SAME ARE FULLY ALLOWABLE. IF THE FINDING IN THE ASSESSMENT ORDER AND THE OBSE RVATION MADE IN THE IMPUGNED ORDER IS ANALYSED, THERE IS A MENTION IN T HE ASSESSMENT ORDER THAT THE REGISTERED OFFICE OF ALLIANCE INDUSTRIES O FFICE IS IN GIBRALTAR AND THE MANAGEMENT OFFICE IS IN UAE, THEREFORE, MERELY CLAIMING THAT THE DIRECTOR WENT TO USA FOR MEETING WITH THE OFFICIALS OF M/S. ALLIANCE INDUSTRIES, USA, IS UNSUBSTANTIATED. AT ANY STAGE, THE ASSESSEE DID NOT PRODUCE ANY DOCUMENT/COMMUNICATION THAT THE DIRECTO R VISITED US FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE AND ESPECIA LLY WITH M/S ALLIANCE INDUSTRIES. MERE CLAIM IS NOT ENOUGH. EVEN IN THE IMPUGNED ORDER, THE FINDING MENTIONED IN THE ASSESSMENT ORDE R HAS NOT BEEN CONTROVERTED, THEREFORE, THERE IS MERIT IN THE APPE AL OF THE REVENUE, CONSEQUENTLY, THE STAND OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS REVERSED AND THAT OF THE ASSESSING OFF ICER IS RESTORED. RESULTANTLY, THE APPEAL OF THE REVENUE IS ALLOWED. 4 ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF L EARNED REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF HEARING ON 15 TH APRIL, 2010. (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER APRIL 15TH, 2010 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE *DBN/