M/s. Pooja Pharma, Baroda V. The Income tax Officer,Ward-5(2), Baroda

ITA 2800/AHD/2011

• Counselvise Citation: 280020514 RSA 2011
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 11-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Business expenditure; Corroborative evidences
• Section: 143(3)

Judgement Text

, , . .. . . .. . , , , , ! !! ! . .. .'# !'# '# !'# '# !'# '# !'# , $ $ $ $ % % % % IN THE INCOME TAX APPELLATE TRIBUNAL : C BENCH : AHMEDABAD BEFORE HONBLE SHRI D.K.TYAGI, J.M. & HONBLE SHRI A.MOHAN ALANKAMONY, A.M.) ! !! ! . ITA NO. 2800/AHD./2011 : # &' - 2007-2008 M/S. POOJA PHARMA, VADODARA VS- ITO, WARD-5(2 ), VADODARA (PAN : AAHFP 6575C) ( () /APPELLANT) ( *() /RESPONDENT ) () + , / APPELLANT BY : SHRI M.K.PATEL, A.R. *() + , / RESPONDENT BY : SHRI VINOD TANWANI, SR.D.R. -#. + /$ / DATE OF HEARING : 11/01/2012 0'& + /$ / DATE OF PRONOUNCEMENT : 13/01/2012 1 1 1 1 / ORDER PER SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-V, BARO DA IN APPEAL NO.CAB/(A)V-159/09-10 DATED 23.08.2011 FOR THE ASSE SSMENT YEAR 2007-2008 PASSED UNDER SECTION 250 R.W.S. 143(3) OF THE I.T. ACT, 1961. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED TWO GROUN DS, WHEREIN THE LONE SURVIVING GROUND IS GROUND NO.1, WHICH IS REPR ODUCED HEREINBELOW: 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. ASSESSING OFFICER ERRED IN DISALLOWING AND THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-V ERRED IN CON FIRMING THE DISALLOWANCE OF FOREIGN TRAVEL EXPENSES OF RS.9 3,356/-. 3. THE ASSESSEE IS A FIRM TRADING IN DRUG AND PHARM ACEUTICAL PRODUCTS FILED ITS RETURN OF INCOME ON 06.09.2007 DECLARING INCOME OF RS.3,94,830/-. INITIALLY, THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF ITA NO. 2800-AHD-11 2 THE ACT AND SUBSEQUENTLY THE CASE WAS TAKEN UP FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF TH E ACT ON 21.12.2009. THE LD. AO MADE AN ADDITION OF RS.54,30 0/- AND RS.39,056/- INCURRED BY THE ASSESSEE FOR FOREIGN TRAVEL. THIS F OREIGN TRAVEL EXPENSES WERE INCURRED BY THE PARTNERS OF THE FIRM FOR TRAVE L TO U.K. AND U.S.A. THE LD. AO MADE THIS ADDITION BECAUSE THE ASSESSEE COUL D NOT FURNISH ANY SUPPORTING EVIDENCE TO ESTABLISH THAT THE FOREIGN T RAVEL EXPENSE WAS INCURRED FOR THE PURPOSE OF BUSINESS. NO EXCHANGE O F COMMUNICATION BETWEEN THE ASSESSEE AND THE PARTIES FROM ABROAD WE RE PRODUCED BY THE ASSESSEE. 4. AGGRIEVED BY THE TREATMENT OF THE LD. AO, THE AS SESSEE APPEALED BEFORE THE LD. CIT(A). BEFORE THE LD. CIT(A) ALSO, THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE TO SUPPORT ITS CLAIM. THEREFOR E, THE LD. CIT(A) CONFIRMED THE ORDER OF THE LD. AO. 5. THE LD. A.R. VEHEMENTLY ARGUED BEFORE US THAT TH E ASSESSEE WAS TRADING IN DRUGS AND PHARMACEUTICAL PRODUCTS AND IT WAS NECESSARY FOR THEM TO MEET PEOPLE FROM THE INDUSTRY ABROAD IN ORD ER TO DEVELOP THE TRADE. TRAVEL TO U.K. AND U.S.A. BY THE PARTNERS OF THE FIRM WAS NECESSARY FOR THE DEVELOPMENT OF ASSESSEES TRADE. LD. A.R. ARGUED THAT ONE OF THE PARTNERS HAS STAYED IN THE RESIDENCE OF A FRIEND IN U.K. AND THAT DOES NOT MEAN THAT THE PARTNER HAD VISITED U.K . FOR PERSONAL PURPOSES, SIMILARLY, THE TRAVEL TO U.S.A. BY THE OT HER PARTNER HAS NOT MATERIALIZED ANY BUSINESS RESULT DOES NOT MEAN THAT THE TRAVEL WAS INTENDED FOR PERSONAL PURPOSES. IT WAS THEREFORE PR AYED THAT THE ADDITION MADE ON ACCOUNT OF FOREIGN TRAVEL MAY BE DELETED, S INCE THESE EXPENSES WERE GENUINE EXPENSES INCURRED FOR THE DEVELOPMENT OF THE BUSINESS. ITA NO. 2800-AHD-11 3 6. THE LD. D.R. STRONGLY OPPOSED TO THE SUBMISSIONS OF THE LD. A.R. HE SUBMITTED THAT THE ASSESSEE HAS NOT PRODUCED ANY CO GENT MATERIALS TO ESTABLISH ITS CLAIM OF BUSINESS EXPENSES TO BE GENU INE EITHER BEFORE THE LD. AO OR BEFORE THE LD. CIT(A). HE FURTHER SUBMITT ED THAT EVEN AT THIS STAGE, THE ASSESSEE HAS NOT COME OUT WITH ANY MATER IALS ON RECORD TO ESTABLISH ITS CLAIM TO BE BONAFIDE. HE HUMBLY SUBMI TTED THAT IN THESE CIRCUMSTANCES, THE ORDER OF LD. CIT(A) MAY BE CONFI RMED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED CAREFULLY THE MATERIALS ON RECORD BEFORE US. AS CONTENDED BY THE LD. D.R., THE ASSESSEE HAS NOT PRODUCED ANY COGENT MATERIALS TO E STABLISH THAT THE FOREIGN TRAVEL EXPENSES WERE INCURRED FOR BUSINESS PURPOSES UPTILL THIS STAGE. SIMPLY INCURRING FOREIGN TRAVEL EXPENDITURE CANNOT MEAN THAT IT WAS INCURRED FOR THE PURPOSE OF BUSINESS AND DEDUCT ION CANNOT BE CLAIMED. SOME COGENT MATERIALS NEED TO BE PRODUCED BEFORE THE REVENUE TO SUBSTANTIATE THE CLAIM OF THE ASSESSEE. IN THE ABSENCE OF THE SAME, WE ARE LEFT WITH NO OTHER OPTION THAN TO CONF IRM THE ORDER OF THE LD. CIT(A). THEREFORE, WE HEREBY CONFIRM THE ORDER OF T HE LD. CIT(A). 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DI SMISSED. 2 1 + 0'& 3#!' 13 / 01 /201 2 ' 4 + . 5 SD/- SD/- (D.K.TYAGI) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT M EMBER DATED : 13/01/2012 ITA NO. 2800-AHD-11 4 1 1 1 1 + ++ + */6 */6 */6 */6 76&/' 76&/' 76&/' 76&/' - 1. () 2. *() 3. !! / -8 4. -8 - - 5. 69 */# , , 5 6. :2 1 , ; / !< , 5 TALUKDAR/ SR. P.S .