M/s. Minda Impco Ltd., New Delhi V. ITO, New Delhi

ITA 4221/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53223 (ITAT-DELHI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 21-11-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 20-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S NEGI

Judgement Text

ITA NO. 4221/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 4221/DEL/2011 A.Y. : 2004-05 M/S MINDA INDUSTRIES LTD., B-64/1, WAZIRPUR INDUSTRIAL AREA, DELHI 110 052 (PAN: AACCM5941R) INCOME TAX OFFICER, WARD-6(1), NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. PRADEEP DINODIA, CA DEPARTMENT BY : SH. R.S. NEGI, SR. D.R. ORDER ORDER ORDER ORDER PER PER PER PER SHAMIM YAHYA: AM SHAMIM YAHYA: AM SHAMIM YAHYA: AM SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 24.6.2 011 PERTAINING TO ASSESSMENT YEAR 2004-05. 2. THE FIRST ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE OF ` 1,50,000/- MADE BY THE ASSESSING OFFICER OUT OF TRAVELLING AND CONVEY ANCE EXPENSES ON ADHOC BASIS. 2.1 THE NEXT ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION MADE BY TH E ASSESSING OFFICER ON ACCOUNT OF COMMUNICATION EXPENSES TO THE EXTENT OF ` 79,642/- ON ADHOC BASIS. ITA NO. 4221/DEL/2011 2 2.2 THE LAST ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF ` 1,56 ,787/- OUT OF STAFF WELFARE EXPENSES. 3. IN THIS CASE ASSESSING OFFICER OBSERVED THAT TH E BOOKS OF ACCOUNT RELIED BY THE TAX AUDITOR WERE PRODUCED ALONGWITH V OUCHERS AND ASSESSING OFFICER PROCEEDED TO MAKE THE FOLLOWING D ISALLOWANCES:- - OUT OF TRAVELLING AND CONVEYANCE EXPENSE AT ` 3 1,80,527/-, HE DISALLOWED A SUM OF ` 1,50,000/- BEING OF PERSO NAL AND UNVOUCHED. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THIS ADDITION. 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. WE FIND THAT THIS DISALLOWANCE HAS BEEN MADE ON PURELY ADHOC BASIS WITHOUT POINTING OUT ANY SPECIFIC SHORTCOMING IN THE VOUCHERS AND RECORDS IN THIS REGARD. UNDER THE CIRCUMSTANCES, I N OUR CONSIDERED OPINION, THIS ADDITION IS LIABLE TO BE DELETED. A CCORDINGLY, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION. 6. THE ASSESSING OFFICER FURTHER OBSERVED THAT STA FF WELFARE EXPENSES HAVE BEEN CLAIMED AT ` 6,31,429/-. THE FO LLOWING VOUCHERS DO NOT QUALIFY FOR EXPENDITURE ON STAFF WELFARE:- 12.3.2004 CANTEEN CHARGES ` 30,710/- 31.3.2004 PROVISION FOR CANTEEN CHARGES ` 31,118 /- ITA NO. 4221/DEL/2011 3 31.3.2004 STAFF GET TOGETHER EXPENSES ` 32,700/ - 31.3.2004 OTHER MISC. EXPENSES ON ` 62,269/- DIFFERENT DATES. ` 1,56,787/- THE AMOUNT OF ` 1,56,787/- IS DISALLOWED. 7. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ADDITION. 8. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. IN OUR CONSIDERED OPINION, THE NATURE OF EXPENSES MENTI ONED ABOVE QUALITY FOR STAFF WELFARE EXPENSES AND WE DO NOT SE E ANY REASON THAT THIS SHOULD BE DISALLOWED. ACCORDINGLY, WE SET ASI DE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION. 9. ASSESSING OFFICER FURTHER OBSERVED THAT COMMU NICATION EXPENSES HAVE BEEN CLAIMED AT ` 7,96,426/- AND A SU M OF 79,642/-, IS NOT ALLOWED AS A DEDUCTION. 10. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ADDITION. 11. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT THIS DISALLOWANCE HAS BEEN MADE ON ADHOC B ASIS WITHOUT GIVING ANY COGENT REASON. UNDER THE CIRCUMSTANCES, IN OUR CONSIDERED ITA NO. 4221/DEL/2011 4 OPINION, THIS ADDITION IS LIABLE TO BE DELETED. AC CORDINGLY, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/11/2011. SD/- SD/- [ [[ [A.D. JAIN A.D. JAIN A.D. JAIN A.D. JAIN] ]] ] [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 21/11/2011 SRB 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