ACIT, New Delhi V. M/s. Indian Wind Energy Associates, New Delhi

ITA 2744/DEL/2012

• Counselvise Citation: 274420114 RSA 2012
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 25-03-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 06-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: PAONAM
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : C NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, AM AND SHRI RAJPAL YADAV, JM ITA NO: 2744/DEL/2012 AY : - 2007-08 ACIT, CIRCLE 23(1) VS. INDIAN WIND ENERGY ASSOCIATE S ROOM NO.190, C.R.BDLG. 3 RD FLOOR, PHD HOUSE, SIRI FORT ROAD NEW DELHI AUGUST KRANTI MARG NEW DELHI 110 016 PAN: AAAH 12639 R (ASSESSEE) (RESPO NDENT) APPELLANT BY : SH.SATPAL SINGH, SR.D.R. RESPONDENT BY: SH.PAONAM, ADV. O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AG AINST THE ORDER DT. 29.3.2012 OF THE LD.CIT(APPEALS)-XII, NEW DELHI ON THE FOLLOWING GROUNDS. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(APPEALS) HAS ERRED IN DELETING THE DISALLOWANCE MADE BY ASSESSING OFFICER OF RS.16,36,854/- REPRESENTING 15% OF CONFERENCE (WORKSHOP) EXPENSES. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(APPEALS) HAS ERRED IN DELETING THE DISALLOWANCE MADE BY ASSESSING OFFICER OF RS.2,96,040/- ON ACCOUNT OF TRAVELLING EXPENSES. 2. FACTS IN BRIEF :- THE ASSESSEE IS A SOCIETY REGISTERED UNDER SOCIETIE S REGISTRATION ACT, 1860 AND ENGAGED IN PROMOTION AND DEVELOPMENT OF WIND INDUSTRY AND RUNNING OF WIND MILL IN TERMS OF ITS A IMS AND OBJECTS. INCOME PAGE 2 OF 4 DECLARED DURING THE YEAR IN APPEAL WAS FROM MEMBERS HIP FEES, WIND MILL, CONFERENCE AND OTHER DIRECT INCOME THE ASSESSMENT O F WHICH WAS MADE BY THE A.O. U/S 143(3) OF THE I.T.ACT AT A LOSS OF RS. 1, 21,51,330/- AS AGAINST THE RETURNED LOSS OF RS. 1,44,86,227/- ON ACCOUNT OF CE RTAIN DISALLOWANCES AND ADDITION MADE. THE ASSESSING OFFICER INTER-ALIA D ISALLOWED RS.16,36,854/- CLAIMED AS CONFERENCE EXPENSES AND RS.2,96,040/- AS TRAVELLING EXPENSES. THE ASSESSEE CARRIED THE MATTER IN APPEAL. THE LD.CIT( APPEALS) GRANTED RELIEF. AGGRIEVED THE REVENUE IS IN APPEAL. 3. WE HAVE HEARD SHRI SATPAL SINGH, SR.D.R. ON BEHALF OF THE REVENUE AND SHRI PAONAM, THE LD.COUNSEL FOR THE ASSESSEE. THE LD.CIT(APPEALS) IN HIS ORDER AT PARA HELD AS FOLLOWS: GROUND NOS. 2(A), (B) AND (C) RELATE TO THE ADDITI ON OF RS. 16,36,854/- REPRESENTING 15% OF THE COST FOR HOLDING CONFERENCE '5TH WORLD WIND ENERGY CONFERENCE & EXHIBITION 2006'. THE MATERIAL FACTS AR E THAT DURING THE YEAR BY VIRTUE OF AN AGREEMENT DATED 31-05-2006 ENTERED INT O WITH WORLD WIND ENERGY ASSOCIATION (WWEA) THE ASSESSEE HOSTED THE 5TH WOR LD WIND ENERGY CONFERENCE AND EXHIBITION FROM 6TH TO 8TH NOVEMBER, 2006 AT NEW DELHI. UNDER THE TERMS AND CONDITIONS OF THE SAID AGREEMENT, THE WWEA WAS TO BE PAID 60% OF THE NET SURPLUS OF THE TOTAL RECEIPTS FROM CONFE RENCE AFTER MEETING ALL THE EXPENSES INCURRED IN ORGANIZING THE EVENT. TOTAL RE CEIPTS FROM HOSTING THE SAID CONFERENCE WAS IN THE SUM OF RS. 1,58,45,445/ - AND TOTAL EXPENDITURE INCURRED UNDER DIFFERENT HEADS WAS RS.1,09,12,363/- THEREBY LEAVING A NET SURPLUS OF RS. 49,33,082/ - TO BE SHARED BY WWEA AND THE ASSESSEE IN THE RATIO OF 60% AND 40% RESPECTIVELY. THUS, A SUM OF RS.29,59,855/- REP RESENTING 60% OF THE NET SURPLUS WAS PAYABLE BY THE ASSESSEE TO WWEA. HOWEVE R, WHILE DRAWING UP INCOME AND EXPENDITURE ACCOUNT OF THE CONFERENCE (W ORKSHOP) BY THE AUDITORS, ONLY 15% OF THE COST OF RS. 1,09,12,363/- WHICH WOR KED OUT TO RS. 16,36,854/- WAS DEDUCTED AS PAYABLE TO WWEA AS AGAINST ACTUAL A MOUNT OF RS. 29,59,855/-. THUS, AFTER ACCOUNTING FOR 15% OF COST, TOTAL EXPEN DITURE WAS CLAIMED AT PAGE 3 OF 4 RS.1,25,49,217/- AND NET SURPLUS AT RS. 32,96,238/- IN THE INCOME AND EXPENDITURE STATEMENT OF WWEC-2006. ALTHOUGH SEPARAT E ACCOUNT OF THE CONFERENCE HOSTED WAS MAINTAINED FOR WHICH INCOME A ND EXPENDITURE STATEMENT WAS DRAWN UP WHICH WAS ALSO DULY AUDITED, THE ENTIR E GROSS RECEIPTS OF RS. 1,58,45,455/- FROM CONFERENCE AND TOTAL EXPENDITURE OF RS.1,25,49,217/- (TAKEN AT RS. 1,24,27,156/-) WERE ACCOUNTED FOR IN THE BOO KS OF THE ASSESSEE. A PERUSAL OF COPIES OF THE AUDITED FINANCIAL STATEMENTS FILED BY THE ASSESSEE WILL REVEAL THAT EXCEPT THE CLAIM OF 15% OF COST, NO ANY OTHER AMOUN T ON ACCOUNT OF AMOUNT PAYABLE TO WWEA HAD BEEN CHARGED EITHER TO INCOME A ND EXPENDITURE ACCOUNT OF THE ASSESSEE OR TO INCOME AND EXPENDITURE STATEM ENT OF THE CONFERENCE (WORKSHOP). THUS, CONCLUSION DRAWN BY THE A.O. THAT THE AMOUNT OF RS. 16,36,854/- HAD BEEN CLAIMED TWICE IS WITHOUT ANY B ASIS AND UNSUSTAINABLE AND THE IMPUGNED ADDITION IS LIABLE TO BE DELETED INASM UCH AS THE CLAIM WAS MADE IN TERMS OF THE AGREEMENT AS FOUND BY THE A.O. HIMSELF . IT IS RELEVANT TO MENTION HERE THAT VIDE INVOICE DATED 19-03-2007 WWEA HAD RA ISED A BILL FOR EURO 32000 AGAINST THEIR SHARE IN THE NET SURPLUS OF THE CONFE RENCE INCOME AND THE SAME HAD BEEN PAID BY THE ASSESSEE AFTER DEDUCTION OF TA X U/S 195 OF THE I.T.ACT. 4. AFTER HEARING RIVAL CONTENTIONS, WE FIND THAT THE A.O. IS WRONG IN COMING TO A CONCLUSION THAT THE ASSESSEE HAS CLAIMED A DED UCTION TWICE. THE FINDINGS OF THE LD.CIT(APPEALS) COULD NOT BE CONTROVERTED BY TH E LD.D.R. THERE IS NO DOUBLE DEDUCTION CLAIMED. HENCE THIS GROUND OF THE REVENUE IS DISMISSED. 5. GROUND NO.2 IS ON THE ISSUE OF TRAVELLING EXPENSES. THE LD.D.R. COULD NOT CONTROVERT THE FINDINGS OF THE LD.CIT(APPEALS) THAT THIS EXPENDITURE IS DIFFERENT FROM THE CONFERENCE EXPENSES. HE HELD THAT SEPARAT E SET OF BOOKS ARE BEING MAINTAINED BY THE ASSESSEE. THIS FACTUAL FINDING I S UPHELD. THIS GROUND IS DISMISSED. PAGE 4 OF 4 6. IN THE RESULT THE APPEAL BY THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST MAY,2014. SD/- SD/- (RAJPAL YADAV) ( J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 21 ST MAY, ,2014 *MANGA COPY OF THE ORDER FORWARDED TO: 1. ASSESSEE; 2.RESPONDENT; 3.CIT; 4.CIT( A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR