Oceanic Motors Pvt.Ltd., Ahmedabad V. The Income tax Officer,Ward-5(2), Ahmedabad

ITA 2757/AHD/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1797 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2005-2006
• Appeal Filed On: 06-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINOD TANWARI
• Assessee Lawyers: G S PATEL
• Keywords: Set aside

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, D-BENCH, AHMEDABAD. BEFORE: SHRI T.K. SHARMA, JUDICIAL MEMBER , AND SHRI D.C. AGRAWAL, ACCOUNTANT MEMBER. ITA NO.2757/AHD/2009 ASSESSMENT YEAR : 2005-2006 OCEANIC MOTORS PVT. LTD. 6, SINDH MODEL SOCIETY, NEAR VADAJ BUS TERMINAL, VADAJ, AHMEDABAD. 380 013 INCOME TAX OFFICER, WARD 5(2), AHMEDABAD. (APPELLANT) VERSUS (RESPONDENT) PAN: AAACO 3186 G FOR THE APPELLANT: G.S.PATEL FOR THE RESPONDENT SHRI. VINOD TANWARI, SR.DR ORDER PER T K SHARMA (JUDICIAL MEMBER): THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 5.03.2009, PASSED BY LD. COMMISSION ER OF INCOME TAX(APPEALS)-XI, AHMEDABAD, FOR THE ASSESSMENT YEAR 2005-06. 2. GROUND NO.1 IS AGAINST CONFIRMING THE DISALLOWAN CE OF RS.1,66,303/- OUT OF RS.5,40,439/- PAID AS MUNICIPAL TAX DURING T HE PREVIOUS YEAR. AT THE TIME OF HEARING ON BEHALF OF THE ASSESSEE, SHRI G.S .PATEL APPEARED AND CONTENDED THAT IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE HAS PAID ARREARS OF HOUSE TAX AMOUNTING TO RS.1,66,303/-. THIS WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND THAT THIS AMOUNT WAS NOT DISALLOWED IN THE RETURN O F INCOME IN THE EARLIER YEARS THEREFORE, IT CANNOT BE ALLOWED IN THE ASSESSMENT Y EAR UNDER APPEAL. 3. ON APPEAL IN THE IMPUGNED ORDER, LEARNED COMMISS IONER OF INCOME TAX (APPEALS) UPHELD THE AFORESAID DISALLOWANCE ON THE GROUND THAT THE ASSESSEE HAS CLAIMED THE AFORESAID AMOUNT OF RS.1,6 6,303/- IN THE ASSESSMENT YEAR UNDER APPEAL AS WELL AS IN THE EARL IER YEARS. AGGRIEVED BY THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (AP PEALS), THE ASSESSEE IS IN APPEAL BEFORE US. 2 ITA NO.2757/AHD/2009 4. AT THE TIME OF HEARING BEFORE US, LEARNED COUNS EL ON BEHALF OF THE ASSESSEE SHRI G.S.PATEL APPEARED AND PRODUCED THE B ILL/RECEIPT DATED 29.03.2005 THROUGH WHICH THE ASSESSEE HAS PAID RS.1 ,66,303/- IN THE MONTH OF MARCH, 2005. THE COUNSEL OF THE ASSESSEE SUBMITT ED THAT ARREAR OF RENT WAS NEVER CLAIMED IN EARLIER ASSESSMENT YEAR AND AS PER PROVISIONS CONTAINED IN SECTION 43B. IT IS ALLOWABLE IN THE YE AR OF ACTUAL PAYMENT. THE ARREAR OF MUNICIPAL TAXES WAS NEVER CLAIMED IN THE EARLIER ASSESSMENT YEAR. THEREFORE, ASSESSING OFFICER BE DIRECTED TO ALLOW T HE SAME ON PAYMENT BASIS IN THE ASSESSMENT YEAR UNDER APPEAL. SHRI VINOD TAN WARI LEARNED DEPARTMENTAL REPRESENTATIVE APPEARED FOR THE REVENU E CONTENDED THAT THE ASSESSEE HAS NOT FURNISHED THE DETAILS OF ARREAR EI THER BEFORE THE ASSESSING OFFICER OR BEFORE THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS). THE ARREAR OF HOUSE TAXES CAN BE ALLOWED ONLY WHEN IT W AS DISALLOWED IN THE EARLIER YEARS. BEFORE THE ASSESSING OFFICER ASSESSE E FAILED TO POINT OUT THAT ANY DISALLOWANCE WAS MADE IN THE EARLIER YEARS, THE REFORE, ARREARS OF MUNICIPAL TAXES CANNOT BE ALLOWED IN THE ASSESSMENT YEAR UNDER APPEAL. 5. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES. BEFORE THE ASSESSING OFFICER, THE ASSESSEE FURNISHE D DETAILS OF PAYMENT OF RS.1,66,303/- BEING ARREAR OF MUNICIPAL TAXES. NO D ETAILS, INDICATING THE YEAR TO WHICH IT PERTAINS WAS FURNISHED. IN THESE CIRCUM STANCES, WE RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WI TH THE DIRECTION THAT THE ASSESSEE SHOULD FURNISH DETAILS OF ARREARS I.E. WHE N ARREARS DEMAND WAS RAISED/BILL WAS ISSUED. WHETHER IT WAS RECORDED IN THE BOOKS OF ACCOUNT. WHETHER IT WAS CLAIMED AND/OR ALLOWED IN THE RELEVA NT ASSESSMENT YEAR. THE ASSESSING OFFICER MAY VERIFY THE SAME AND IN CASE I T IS NEITHER CLAIMED NOR ALLOWED IN THE EARLIER YEAR, THE ASSESSING OFFICER WILL ALLOW THE SAME IN THE ASSESSMENT YEAR UNDER APPEAL BECAUSE ARREAR OF MUNI CIPAL TAX AMOUNTING TO THIS RS.1,66,303/- IS PAID IN THE PREVIOUS YEAR REL EVANT TO THE ASSESSMENT YEAR UNDER APPEAL. WE DIRECT ACCORDINGLY. 6. GROUND NO.2 AGAINST THE CONFIRMING THE DISALLOWA NCE OF RS. 3,03,279/- BEING FOREIGN TRAVELING EXPENSES OF A DIRECTOR WITH HIS WIFE AND DAUGHTER OF BANGKOK. 3 ITA NO.2757/AHD/2009 7. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER D ISALLOWED RS.3,03,015/- BEING FOREIGN TRAVELING EXPENSES INCU RRED. BEFORE THE ASSESSING OFFICER, IT WAS SUBMITTED THAT DIRECTOR MR.K. THAKK AR, HIS WIFE MRS.KHUSHI THAKKAR AND DAUGHTER SHILPA THAKKAR HAVE CARRIED OU T THE FOREIGN TRIP TO BANGKOK. ACCORDINGLY TO ASSESSING OFFICER, NO PROPE R JUSTIFICATION WAS GIVEN FOR THIS TRIP, THEREFORE, HE DISALLOWED THE ENTIRE EXPENSES. ON APPEAL, LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE DISALLOWANCE. 8. AT THE TIME OF HEARING, LEARNED COUNSEL OF THE A SSESSEE PRODUCED THE LETTER DATED 17.08.2007, WHEREIN DETAILS OF FOREIGN TRAVELING EXPENSES OF RS.3,03,279/- WERE FURNISHED BEFORE THE ASSESSING O FFICER ALONG WITH THE SAID LETTER. THE ASSESSEE HAS ALSO FILED A LETTER DATED 27.10.2004 FROM TVS MOTOR CO. ASKING THE ASSESSEE TO ATTEND ANNUAL DEALER CON VENTION, 2004 FOR BANGKOK (THAILAND) . THE ASSESSEE COMPANY IS ENGAGE D IN THE BUSINESS TRADING IN VEHICLES OF TVS MOTOR COMPANY LTD. THE C OUNSEL OF THE ASSESSEE SUBMITTED THAT THE EXPENDITURE WAS INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. THEREFORE, ASSESSING OFFICER B E DIRECTED TO ALLOW THE SAME. ON THE OTHER HAND, SHRI VINOD TANWARI LEARNED SR. DEPARTMENTAL REPRESENTATIVE CONTENDED THAT AS PER LETTER OF TVS MOTOR COMPANY DATED 27.10.2004, IT WAS MENTIONED THAT THE FULL HOSPITAL ITY AT BANGKOK (BOARDING, LODGING AND SIGHT SEEING) SHALL BE EXTENDED TO DEAL ER DELEGATES BY TVS MOTORS. ONE DELEGATE PER DEALERSHIP ONLY. IN THE SA ID LETTER, IT WAS ALSO MENTIONED THAT THE DELEGATE SHOULD AVOID ADDITIONAL DELEGATE I.E. SPOUSE ETC. THEREFORE, AT THE MOST TRAVELING EXPENSES IN RESPEC T OF DIRECTOR MR.K. THAKKAR, CAN BE ALLOWED AND NOT IN RESPECT OF SPOUS E AND CHILDREN. 9. HAVING HEARD BOTH SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THE AUTHORITY BELOW. IN THE LETTER DATED 27.10.2004 , M/S. TVS MOTORS CO. STATED THAT THE FULL HOSPITALITY OF BANGKOK WILL BE ALLOW TO ONLY ONE DELEGATE PER DEALERSHIP ONLY. IT IS NOT KNOW WHETHER THE ASSESSE E COMPANY IS A DEALER OF TVS MOTORS CO.. AS A MATTER OF FACT, BOTH THE AUTHO RITY BELOW CONVENIENTLY IGNORED THE SUBMISSIONS MADE BY THE ASSESSEE. WE TH EREFORE, SET ASIDE THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) AND RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT HE SHOULD VERIFY 4 ITA NO.2757/AHD/2009 WHETHER THE ASSESSEE COMPANY IS A DEALER OF TVS MOT OR. MAKE NECESSARY INQUIRY AND IF THE DIRECTOR MR.K. THAKKAR HAS ACTUA LLY ATTENDED THE ANNUAL DEALER CONFERENCE AT BANGKOK (THAILAND), HE MAY ALL OW HIS TRAVELING EXPENSES AND OTHER INCIDENTAL EXPENSES IN RESPECT O F HIS TRAVELING. THE TRAVELING EXPENSE INCURRED IN RESPECT OF SPOUSE AND CHILDREN CANNOT BE ALLOWED BECAUSE THESE WERE NOT INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. FOR THIS PURPOSE, THE ASSESSEE SHALL FURNISH NECESSARY DETAILS. THE ASSESSING OFFICER WILL VERIFY THE SAME AND IF SATISFIED, HE WILL ALLOW THE TRAVELING AND INCIDENTAL EXPENSES OF SHRI K.THA KKAR DIRECTOR OF THE ASSESSEE COMPANY. 10. IN THE RESULT, FOR THE STATISTICAL PURPOSES, TH E APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DATED 18 TH DECEMBER, 2009. SD/- SD/- (D.C. AGRAWAL) ( T.K. SHARMA) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED: 18/12/2009 PARAS# COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED 4. THE CIT, 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// ASSTT. REGISTRAR/ DEPUTY REGISTRAR ITAT, AHMEDABAD BENCHES, AHMEDABAD.