Tripat Kaur, New Delhi V. ITO, New Delhi

ITA 3244/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65343 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2008-2009
• Appeal Filed On: 26-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS SHUMANA SEN

Judgement Text

ITA NO. 3244/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H, NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER I.T.A. NO. 3244/DEL/2012 A.Y. : 2008-09 TRIPAT KAUR, A-29, FRIENDS COLONY-EAST, NEW DELHI 110 065 (PAN : AAAPK8020A) VS. ACIT, CIR. 22(1), NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. VED JAIN, CA DEPARTMENT BY : MRS. SHUMANA SEN, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXIII, NEW DELHI DATED 05.3.2012 PERTAINING TO ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED READ AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (A) IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. 2(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ADHOC DISALLOWANC E ITA NO. 3244/DEL/2012 2 OF AN AMOUNT OF ` 1,69,940/- ON ACCOUNT OF TRAVELLIN G EXPENSES. II) THAT THE ABOVE SAID DISALLOWANCE HAS BEEN CONFIRMED DESPITE THE FACT THAT THE SAME HAS BEEN MADE ON AN ADHOC RATE OF 10% WITHOUT THERE BEING ANY BASIS FOR THE SAME. 3 (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE @10% OF THE TOTAL EXPENDITURE WITHOUT POINTING OUT SPECI FIC EXPENDITURE NOT ELIGIBLE FOR DEDUCTION IS BAD IN L AW. (II) THAT THE 10% DISALLOWANCE ON MERE SUSPICIO N IGNORING THE AUDITED BOOKS OF ACCOUNTS AS CERTIFIED BY THE TAX AUDITOR THAT NO EXPENDITURE IS PERSONAL IN NATURE IS BAD IN L AW. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL. 3. IN THIS CASE ASSESSING OFFICER OBSERVED THAT PE RSONAL ELEMENT IN SOME OF THE EXPENSES CANNOT BE DENIED AND HENCE 10% OF THESE EXPENSES ARE DISALLOWED AND ADDED BACK TO IN THE IN COME OF THE ASSESSEE. THUS ASSESSING OFFICER ADDED ` 1,72,94 1/- BEING THE EXPENDITURE INCURRED ON TRAVELLING EXPENSES, DIWALI EXPENSES AND TELEPHONE EXPENSES. THE ASSESSING OFFICER FURTHE R OBSERVED THAT SUCH DISALLOWANCE WAS ALSO IN LINE OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2007-08. ITA NO. 3244/DEL/2012 3 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (A) CONSIDERED THE ISSUES AND OBSERVED THAT ASSESSEES COUNSEL WAS SPECIFICALLY REQUIRED TO SUBMIT THE NOTE ON THE PUR POSE OF TRAVELLING. HOWEVER, NO DETAIL WAS FILED IN THIS REGARD. AS REGARDS ADDITION ON ACCOUNT OF TRAVELLING EXPENSES LD. COMMISSIONER OF I NCOME TAX (A) CONFIRMED THE ASSESSING OFFICERS ACTION. FURTHERMO RE, LD. COMMISSIONER OF INCOME TAX (A) DELETED THE ADDITION ON ACCOUNT OF TELEPHONE EXPENSES AND DIWALI EXPENSES. 5. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEA L BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED. WE FIND THAT THE ADDITION ON ACCOUNT OF TRAVELLING EXPENSES WAS TOTALLY BASED ON SURMISES AND CONJECTUR ES. ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY COGENT BASIS AS TO WHY THIS EXPENDITURE WAS TO BE DISALLOWED. IT IS NOT THE C ASE THAT EXPENDITURE WAS CONSIDERED TO BE BOGUS OR ANY SHORTCOMING IN THE VOUCHERS IN THIS REGARD WAS OBSERVED BY THE REVENUE. UNDER THE CIR CUMSTANCES, WE HOLD THAT ESTIMATED ADDITION WITHOUT ANY BASIS CANNO T BE SUSTAINED. IN THIS REGARD, THE CASE LAW RELIED UPON BY THE LD. COUNSEL OF THE ASSESSEE IN THE CASE OF THE ITO VS. LAKE PALACE HOTE LS AND MOTELS (P) LTD. 13 TTJ (JP) 216 IS GERMANE. IN THIS CASE, IT WAS HELD THAT THE TRAVELLING EXPENSES AND SALARY EXPENSES, ADDITION MADE ON ESTIMATE BASIS CANNOT BE JUSTIFIED. MOREOVER, DISALLOWANCE IS ALSO NOT JUSTIFIED MERELY ON THE GROUND THAT SIMILAR DISALLOWANCE WAS MA DE IN THE PREVIOUS YEAR. ACCORDINGLY, IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENT, WE HOLD THAT THE ADDITIO N ON ACCOUNT OF TRAVELLING EXPENSES IS LIABLE TO BE DELETED AND HE NCE, WE SET ASIDE THE ITA NO. 3244/DEL/2012 4 ORDERS OF THE AUTHORITIES BELOW AND DECIDED THE ISS UE IN FAVOUR OF THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/9/2012. SD/- SD/- [ [[ [C.M. GARG C.M. GARG C.M. GARG C.M. GARG] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 07/9/2012 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES