DCIT, Circle- 5(1), New Delhi V. Bina Fashions N Food Pvt. Ltd., New Delhi

ITA 3612/DEL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4660 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 14-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N PANDEY
• Assessee Lawyers: SHIV KUMAR ARORA
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: A , NEW DELHI BEFORE SMT. BEENA A PILLAI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 3 6 12 / DEL /20 18 AY: 2014 - 15 DCIT, CIRCLE 5(1) NEW DELHI VS . BINA FASHIONS N FOOD P LTD. 53, COMMUNITY CENTRE NEW FRIENDS COLONY NEW DELHI 110 025 PAN:AABCB5582A (APPELLANT) (RESPONDENT) DEPARTMENT BY: SH. S.N.PANDEY, SR.D.R. A SSESSEE BY : SH. SHIV KUMAR ARORA, C.A. DATE OF HEARING : 16 /0 5 /2019 DATE OF PRONOUNCEMENT : 31 /0 5 /2019 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER P RESENT APPEAL HAS BEEN FILED BY REVENUE AGAINST ORDER DATED 10/01/15 PASSED BY LD.CIT(A) - 29, NEW DELHI FOR ASSESSMENT YEAR 2014 - 15 ON FOLLOWING GROUNDS OF APPEAL: THE ACI T, CIRCLE - 5(1), NEW DELHI IS HEREBY FILING APPEAL IN THE ABOVE MENTIONED CASE BEFORE THE 1TAT, NEW DELHI ON THE FOLLOWING GROUNDS OF APPEAL. 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITIONS OF RS. 74,81,090/ - (50% OF RS. 1,49,62,183/ - ) ON ACCOUNT OF FOREIGN TRAVEL EXPENSES ENTIRELY ON SUBMISSION OF THE AS SESSEE AND ITA NO.3612/DEL/2018 AY:2014 - 15 DCIT, CIRCLE 5(1) VS. BINA FASHIONS N FOOD P LTD.NEW DELHI 2 WITHOUT CONSIDERING THE DETAILED REASONS GIVEN BY THE AO IN THE ASSESSMENT ORDER. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE FACTS THAT THE MRS. BINA MODI IS A DIRECTOR IN FOUR COMPANIES, INCLUDING THE ASSESSEE COMPANY, AND THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE WHETHER THE ABOVE EXPENSES WERE INCURRED WHOLLY AND EXCLUSIVELY FOR THE BUSINESS PROMOTION OF ASSESSEE COMPANY ONLY. 3. THAT THE ORDER OF THE CIT(A) IS PERVERSE, ER RONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 4. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUNDS(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 2. BRIEF FACTS OF THE CASE ARE AS UNDER : A SSESSEE FILED ITS RETURN OF INCOME DECLARING NIL INCOME WITH CUR RENT YEAR LOSSES OF RS.28,04, 506/ - ON 29/09/14. C ASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143 (2) ALONG WITH QUESTIONNAIRE AND NOTICE UNDER SECTION 142(1) OF THE IN COME TAX ACT, 1961 (THE ACT) WAS ISSUED TO ASSESSEE. IN RESPONSE TO STATUTORY NOTICES, REPRESENTATIVES OF ASSESSEE APPEARED BEFORE LD. AO AND FILED DETAILS AS CALLED FOR. 2.1. LD. AO OBSERVED THAT DURING YEAR ASSESSEE WAS ENGAGED IN BUSINESS OF RUNNING RESTAURANTS, BEAUTY PARLOUR SERVICES AND MANUFACTURING AND RETAILING GARMENT BUSINESS. LD. AO OBSERVED THAT ASSESSEE HAD DEBITED AMOUNT OF RS.1,68,82,921/ - , ON ACCOUNT OF TRAVEL LING AND CONVEYANCE S . FROM DETAILS FILED IN REGARDS TO TRAVELLING AND CONVEYANCE, IT WAS OBSERVED BY LD.AO THAT MAJOR ITA NO.3612/DEL/2018 AY:2014 - 15 DCIT, CIRCLE 5(1) VS. BINA FASHIONS N FOOD P LTD.NEW DELHI 3 PORTION OF EXPENSES WAS ON ACCOUNT OF FOREIGN TRAVEL AMOUN TING TO RS.1,49,62, 183/ - . 2.2. AFTER PERUSAL OF SUBMISSIONS ADVANCED BY LD.AO, LD.AO WAS OF OPINION THAT THERE WAS NO MAJOR IMPROVEMENT IN BUSINESS OR INCOME OF ASSESSEE IN COMPARISON WITH EARLIER YEARS WHEN THERE WAS NO FOREIGN TRAVEL EXPENSES CLAIMED BY ASSESSEE WHILE THE CLAIM OF ASSESSEE THAT SHE HAD UNDERTAKEN TRAVEL TO KEEP HER ABREAST OF ALL TRENDS IN THE WORLD. LD.AO ACCORDINGLY REJECTED THE CLAIM OF ASSESSEE AND MADE AN ADDITION IS OF 50% OF TRAVEL EXPENSES CLAIMED AMOUNTING TO RS.74,81,090/ - . 3. AGGRIEVED BY ORDER OF L D.AO , ASSESSEE PREFERR ED APPEAL BEFORE LD. CIT (A) WH O ALLOWED THE CLAIM OF ASSESSEE. 4. AGGRIEVED BY ORDER OF LD. CIT (A) REVENUE IS IN APPEAL BEFORE US NOW. 5. THE ONLY ISSUE AGITATED BY REVENUE IS IN RESPECT OF DISALLOWANCE DELETED BY LD.CIT(A) IN RE SPECT OF FOREIGN TRAVEL UNDERTAKEN BY PROPRIETOR. 6. GROUND NO. 3 AND 4 ARE GENERAL IN NATURE AND THEREFORE DO NOT REQUIRE ANY ADJUDICATION. 7 . GROUND NO. 1 - 2 IS IN RESPECT OF 50% DISALLOWANCE DELETED BY LD. CIT (A) ON ACCOUNT OF FOREIGN TRAVEL EXPE NSES. 7.1. LD. DR PLACED RELIANCE UPON ORDER PASSED BY LD.AO. 7.2. LD.AR SUBMITTED THAT DETAILS OF ALL FOREIGN TRAVEL ALONG WITH PURPOSE AND THE PERIOD OF TRAVEL HAS BEEN SUBMITTED BY ASSESSEE BEFORE AUTHORITIES BELOW. HE SUBMITTED THAT IT WAS AFTE R DUE ITA NO.3612/DEL/2018 AY:2014 - 15 DCIT, CIRCLE 5(1) VS. BINA FASHIONS N FOOD P LTD.NEW DELHI 4 CONSIDERATION OF THESE DETAILS THAT LD.CIT(A) WAS RIGHT IN DELETING THE ADDITION. 8. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES IN LIGHT OF RECORDS PLACED BEFORE US. 8.1. IT IS OBSERVED THAT LD.AO DISALLOWED 50% OF FOREIGN TRAVEL EXPENSES. THUS IT IMPLIES HE HAD NOT DISPUTED THAT ASSESSEE HAD UNDERTAKEN FOREIGN TRAVEL FOR PURPOSES OF BUSINESS. FOR DISALLOWING 50% OF FOREIGN TRAVEL, LD.AO HAS NOT GIVEN ANY BASIS EXCEPT FOR REASON THAT ASSESSEE HAS NOT EARNED ANY PROFITS DURING YEAR AS COMP ARED TO EARLIER YEARS WHEN THERE WAS NO FOREIGN TRAVEL UNDERTAKEN BY THE PROPRIETOR. THE DETAILS REPRODUCED BY LD.CIT(A) AT PAGE 10 - 13 OF HIS ORDER NARRATES PURPOSE FOR WHICH FOREIGN TRAVEL WAS UNDERTAKEN. ASSESSEE IS IN THE BUSINESS OF RETAILING OF GAR MENTS AND RUNNING OF RESTAURANTS. MOST OF THE VISITS TO FOREIGN COUNTRIES HAVE BEEN EITHER FOR PARTICIPATING IN EXHIBITION - CUM - SALE OF GARMENTS OR EXPLORING RESTAURANTS AND TO HAVE T IE - UPS FOR FOOD CHAINS. LD.AO HAS ALSO NOT DISPUTED ACTIVITIES CARRIED OUT BY ASSESSEE. WE THEREFORE DO NOT FIND JUSTIFICATION IN DISALLOWANCE MADE BY LD.AO AND THE SAME STANDS DELETED. ACCORDINGLY THESE GROUNDS RAISED BY REVENUE STANDS DISMISSED. 9. IN THE RESULT APPEAL FILED BY REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 1 / 0 5 / 2 0 1 9 . S D / - S D / - (PRASHANT MAHARISHI) (BEENA A PILLAI) ACCOUNTANT MEMBE R JUDICIAL MEMBER DT. 3 1 S T MA Y , 2019 * GMV ITA NO.3612/DEL/2018 AY:2014 - 15 DCIT, CIRCLE 5(1) VS. BINA FASHIONS N FOOD P LTD.NEW DELHI 5 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES DATE DRAFT DICTATED ON 29.05.2019 DRAFT PLACED BEFORE AUTHOR 31.05.2019 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS KEPT FOR PRONOUNCEMENT ON & ORDER UPLOADED ON : FILE SENT TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.