Yamaha Motor India Pvt. Ltd., V. DCIT, Circle-18(1),

ITA 3199/DEL/2004

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97286 (ITAT-DELHI)
• Duration Of Justice: 11 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 16-09-2015
• Assessment Year: 1999-2000
• Appeal Filed On: 12-07-2004
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANIL K MISRA
• Assessee Lawyers: SIDDHANTH GUPTA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : G : NEW DELHI BEFORE SHRI R.S. SYAL, AM AND SHRI C.M. GARG, JM ITA NO.3199/DEL/2004 ASSESSMENT YEAR : 1999-2000 YAMAHA MOTOR INDIA PVT. LTD., FIRST FLOOR, THE GREAT EASTERN CENTRE, 70, NEHRU PLACE, BEHIND IFCI TOWER, NEW DELHI 110 019. PAN: AAACE1647C VS. DCIT, CIRCLE-18(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SIDDHANTH GUPTA, ADVOCATE DEPARTMENT BY : SHRI ANIL K. MISRA, CIT, DR DATE OF HEARING : 16.09.2015 DATE OF PRONOUNCEMENT : 18.09.2015 ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT(A) ON 31.3.2004 IN RELATION TO THE ASSESSME NT YEAR 1999-2000. ITA NO.3199/DEL/2004 2 2. IN THIS CASE, AN ORDER U/S 254(1) OF THE ACT WAS EARLIER PASSED BY THE TRIBUNAL. THE REVENUE ASSAILED THE SAID TRIBUNA L ORDER BEFORE THE HONBLE HIGH COURT. VIDE ITS JUDGMENT DATED 14.9.2 000, THE HONBLE HIGH COURT SET ASIDE THE TRIBUNAL ORDER ON THE ISSU E OF DELETION OF DISALLOWANCE OF RS.22,47,565/- OUT OF TRAVELLING AN D CONVEYANCE EXPENSES AND REMITTED THE MATTER TO THE TRIBUNAL FO R A FRESH HEARING AND TAKING A DECISION ON MERITS BY GIVING COGENT AND SU FFICIENT REASONS. 3. BRIEFLY STATED, THE FACTS OF THIS ISSUE ARE THAT THE ASSESSEE DEBITED A SUM OF RS.6.346 CRORE ON ACCOUNT OF TRAVELLING AND CONVEYANCE EXPENSES. ON PERUSAL OF THE DETAILS, IT WAS OBSERV ED BY THE AO THAT WHILE THE ASSESSEE-COMPANY HAD A TIE UP WITH JAPAN AND MARKETS IN NEPAL AND BANGLADESH, A SUBSTANTIAL PART OF TRAVEL LING EXPENSES WAS ON ACCOUNT OF TRAVEL EXPENDITURE OF SHRI NIKHIL NAND A FOR VISITS TO MALAYSIA AND UK. SIMILARLY, SHRI K. MINAMI AND SHR I VIMAL LANGER, OTHER TWO DIRECTORS, WERE FOUND TO HAVE VISITED UK . THE ASSESSEE WAS REQUIRED TO EXPLAIN THE BUSINESS CONNECTION OF THE VISITS OF THESE THREE DIRECTORS OF THE ASSESSEE COMPANY TO MALAYSIA AND U K. NO EVIDENCE ITA NO.3199/DEL/2004 3 WAS FILED SUBSTANTIATING THE CLAIM OF SUCH EXPENSES HAVING ANY BUSINESS CONNECTION. THIS LED TO THE MAKING OF ADDITION OF RS.22.47 LAC. THIS ADDITION WAS CONFIRMED BY THE LD. CIT(A). HOWEVER, THE TRIBUNAL DELETED THE DISALLOWANCE BY OBSERVING THAT THE TRAV ELLING WAS DONE BY THE DIRECTORS WHO WERE EMPLOYEES OF THE COMPANY AND NO ELEMENT OF PERSONAL NATURE COULD BE ATTRIBUTED IN CASE OF EXPE NSES INCURRED BY THE EMPLOYEES OF THE COMPANY. IN AN APPEAL BY THE REVE NUE AGAINST THIS TRIBUNAL ORDER, THE HONBLE HIGH COURT OBSERVED TH AT: NO REASONS ARE GIVEN BY THE TRIBUNAL IN SUPPORT OF ITS OPINION. T HE FINDINGS ARRIVED AT BY THE ASSESSING OFFICER AS WELL AS THE CIT(A) ARE NOT EVEN DISCUSSED AND NO REASONS ARE GIVEN TO DISCARD THOSE FINDINGS. THE IMPRESSION WHICH IS GIVEN IS THAT EXPLANATION OF THE ASSESSEE WAS TREATED AS GOSPEL TRUTH. THIS APPROACH OF THE TRIBUNAL IS ERRONEOUS. THE TRIBUNAL SHOULD HAVE DISCUSSED THE MATTER AT LENGTH IF IT WAS ACCEP TING THE VERSION OF THE ASSESSEE BY STATING THE REASONS AND ON WHAT BASIS I T HELD THE AFORESAID VIEW, MORE PARTICULARLY, WHEN THE ORDERS OF THE ASS ESSING OFFICER AS WELL AS CIT(A) DISCLOSED DETAILED REASONS REJECTING SAME VERY VERSION. ITA NO.3199/DEL/2004 4 4. A PERUSAL OF THE ABOVE OBSERVATIONS MADE BY THE HONBLE HIGH COURT DIVULGES THAT THE TRIBUNAL HAS BEEN CALLED UP ON TO GIVE ITS OWN REASONS FOR AFFIRMING OR REJECTING THE REASONING GI VEN BY THE AO AS WELL AS THE CIT(A). WE AFFORDED AN OPPORTUNITY TO THE A SSESSEE TO CO-RELATE THE TRIPS OF THESE THREE DIRECTORS TO MALAYSIA AND UK WITH THE BUSINESS PURPOSE. EXCEPT FOR FILING A TOUR REPORT OF ONE OF THE DIRECTORS, WHICH IS AN SIMPLY AN INTERNAL EVIDENCE, THE LD. AR COULD NO T PLACE ON RECORD ANY EXTERNAL EVIDENCE TO SUGGEST THAT ANY BUSINESS MEET INGS WERE HELD IN MALAYSIA OR UK, WHICH WERE ATTENDED BY THESE THREE DIRECTORS. ON BEING CALLED UPON TO FILE ANY CORRESPONDENCE WITH THE JAP ANESE COMPANY TO SUPPORT THE ASSESSEES CONTENTION THAT MEETINGS WER E ORGANIZED IN MALAYSIA AND UK, THE LD. AR FAIRLY CONCEDED THAT NO SUCH EVIDENCE WAS AVAILABLE. THIS SHOWS THAT EXCEPT FOR A BALD STATEM ENT THAT THE BUSINESS MEETINGS WERE ORGANIZED BY THE JAPANESE COMPANY IN MALAYSIA AND UK, THERE IS NO EVIDENCE WORTH THE NAME TO SUPPORT SUCH A CLAIM. WHEN THE POSITION IS SUCH, THE NATURAL CONCLUSION WHICH FOLL OWS IS THAT THERE IS NO POSITIVE EVIDENCE TO THE EFFECT THAT THESE FOREIGN TRIPS WERE UNDERTAKEN BY THE THREE DIRECTORS FOR ANY BUSINESS PURPOSE. U NDER SUCH ITA NO.3199/DEL/2004 5 CIRCUMSTANCES, THE VIEW TAKEN BY THE AUTHORITIES BE LOW CANNOT BE DISTURBED. WE, THEREFORE, COUNTENANCE THE IMPUGNED ORDER IN SUSTAINING THE DISALLOWANCE OF RS.22.47 LAC. 5. IN THE RESULT, THIS GROUND IS NOT ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 18.09.201 5. SD/- SD/- [C.M. GARG] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 18 TH SEPTEMBER, 2015. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.