Seema Parimoo, Ahmedabad V. The Dy.CIT.,Circle-7, Ahmedabad

ITA 2481/AHD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6641 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-05-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 09-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P TALATI
• Assessee Lawyers: S N DIVETIA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND D. C. AGRAWAL , AM) ITA NO.2481/AHD/2010 A. Y.: 2007-08 SEEMA PARIMOO, 131, LANE-4, SECTOR-7, SATYAGRAH CHHAVANI, SATELLITE ROAD, AHMEDABAD VS THE D. C. I. T., CIRCLE-7 AHMEDABAD PA NO. AFAPP 9025 M (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. N. DIVETIA, AR RESPONDENT BY SHRI S. P. TALATI, SR. DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-XV I, AHMEDABAD DATED 17-05-2010 FOR ASSESSMENT YEAR 2007-08, CHALL ENGING THE DISALLOWANCE OF RS.2,02,772/- ON ACCOUNT OF FOREIGN TRAVEL EXPENSES. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE IS INDIVIDUAL AND THE NATURE OF BUSINESS OF THE ASSESSEE IS MANUF ACTURING AND EXPORT OF GRANITE TILES. THE ASSESSEE CLAIMED LODGI NG AND BOARDING EXPENSES AND TRAVELING EXPENSES FOR VISIT TO NEW ZE ALAND. THE AO OBSERVED THAT THERE IS NO BUSINESS FROM NEW ZEALAND IN THE ASSESSMENT YEAR UNDER APPEAL AND THE SUCCEEDING YEA R. THE ASSESSEE SUBMITTED THAT SHE BEING PROPRIETOR OF M/S . SPARKLE GRANITES AND ENGAGED IN EXPORT BUSINESS HAS VISITED NEW ZEALAND TO PROCURE BUSINESS FROM THE STONE COMPANIES TO OPEN N EW MARKET IN ITA NO.2481/AHD/2010 SEEMA PARIMOO VS DCIT, CIRCLE-7, AHMEDABAD 2 GRANITE PRODUCTS. THE AO NOTED THAT TOUR TO NEW ZEA LAND WAS BOOKED THROUGH M/S. THOMAS COOK WHO ARE NORMALLY ENGAGED T HE PACKAGE TOURS. THE AO, THEREFORE, HELD THAT THE JOURNEY PER FORMED BY THE ASSESSEE WAS A PLEASURE TRIP AND WAS NOT RELATED WI TH THE BUSINESS OF THE ASSESSEE. FOREIGN TRAVEL EXPENSE WAS, THEREFORE, DISALLOWED . THE ASSESSEE REITERATED THE SUBMISSION MADE BEFORE THE LEARNED CIT(A) BUT THE SUBMISSION OF THE ASSESSEE WAS NOT ACCEPTED AND THE APPEAL OF THE ASSESSEE WAS DISMISSED. 3. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE DO NOT FIND ANY JUSTIFICATION FOR THE AUTHORITIES BELOW TO DISALLOW THE FOREIGN TRAVEL EXPENSES. IT IS ADMITTED FACT THAT THE ASSESSEE IS AN EXPORTER AND IN THE ASSESSMENT YEAR UNDER APPEAL THE EXPORT TURNOVE R OF THE ASSESSEE WAS 97% AND IN THE PRECEDING ASSESSMENT YE ARS ALSO THE EXPORT TURNOVER WAS 97% AND 96%. THE ASSESSEE HAS C ONDUCTED EXPORTS IN SEVERAL CRORES OF RUPEES. THE CLAIM OF T HE ASSESSEE WAS DISALLOWED MERELY BECAUSE THE ASSESSEE PERFORMED TH E FOREIGN JOURNEY THROUGH M/S. THOMAS COOK. THE AO WAS OF THE VIEW THAT M/S. THOMAS COOK NORMALLY UNDERTAKE PACKAGE TOUR TO VISI T FOREIGN COUNTRY. THIS ITSELF IS NO GROUND TO REJECT THE CLA IM OF THE ASSESSEE BECAUSE IT IS THE CHOICE OF THE BUSINESSMAN TO SEE HOW THEY HAVE TO UNDERTAKE FOREIGN TRIPS FOR THE PURPOSE OF THE BUSI NESS OF THE ASSESSEE. THE ASSESSEE ALSO EXPLAINED THAT IN ORDER TO PROCURE BUSINESS ORDER AND EXTENSION OF BUSINESS ACTIVITIES SHE HAD UNDERTAKEN VISIT TO NEW ZEALAND, THEREFORE, IT IS C LEARLY BUSINESS TOUR UNDERTAKEN BY THE ASSESSEE. OTHERWISE, NO CASE IS M ADE OUT THAT THE ASSESSEE HAS NOT MADE THE OFFICIAL TRIP TO THE AFOR ESAID FOREIGN ITA NO.2481/AHD/2010 SEEMA PARIMOO VS DCIT, CIRCLE-7, AHMEDABAD 3 COUNTRY. THE REASON GIVEN BY THE AUTHORITIES BELOW ARE NOT SUFFICIENT TO DISALLOW THE CLAIM OF THE ASSESSEE. CONSIDERING THE EXPLANATION OF THE ASSESSEE BEFORE THE AUTHORITIES BELOW AND THE D ETAILS SUBMITTED BY THE ASSESSEE IN THE PAPER BOOK, WE ARE OF THE VI EW THE ASSESSEE HAS INCURRED THE AMOUNT ON ACCOUNT OF FOREIGN TRAVE L EXPENSES WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS, THEREF ORE, THE ASSESSEE WOULD BE ENTITLED FOR DEDUCTION OF THE SAME AMOUNT. WE ACCORDINGLY, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND D ELETE THE ENTIRE ADDITION. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13-05-2011 SD/- SD/- (D. C. AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 13-05-2011 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD