The DCIT, CIR-52, KOLKATA, Kolkata V. M/s A & A International, Kolkata

ITA 469/KOL/2009

• Counselvise Citation: 46923514 RSA 2009
• Duration Of Justice: 6 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 27-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BEING
• Keywords: Business expenditure

Judgement Text

I.T.A. NO. 469/KOL./2009 ASSESSMENT YEAR: 2005-2006 & ITA NO. 508/KOL/2009 ASSESSMENT YEAR: 2005-2006 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 469/KOL/ 2009 ASSESSMENT YEAR : 2005-2006 DEPUTY COMMISSIONER OF INCOME TAX,................. ..................APPELLANT CIRCLE-52, KOLKATA, AAYAKAR BHAWAN DAKSHIN, 2, GARIAHAT ROAD (SOUTH), KOLKATA-700 068 -VS.- M/S. A & A INTERNATIONAL,.......................... ............................RESPONDENT 2, BEDIADANGA FIRST LANE, KOLKATA-700 039 [PAN : AAFFA 2080 D] & I .T.A. NO. 508/KOL/ 2009 ASSESSMENT YEAR : 2005-2006 M/S. A & A INTERNATIONAL,.......................... ............................APPELLANT 2, BEDIADANGA FIRST LANE, KOLKATA-700 039 [PAN : AAFFA 2080 D] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,................. ..................APPELLANT CIRCLE-52, KOLKATA, AAYAKAR BHAWAN DAKSHIN, 2, GARIAHAT ROAD (SOUTH), KOLKATA-700 068 APPEARANCES BY: N O N E, FOR THE DEPARTMENT SHRI S.M. SURANA, ADVOCATE , FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : DECEMBER 07, 2015 DATE OF PRONOUNCING THE ORDER : DECEMBER 09, 2015 I.T.A. NO. 469/KOL./2009 ASSESSMENT YEAR: 2005-2006 & ITA NO. 508/KOL/2009 ASSESSMENT YEAR: 2005-2006 PAGE 2 OF 5 O R D E R PER SHRI P.M. JAGTAP :- THESE TWO APPEALS, ONE FILED BY THE ASSESSEE BEING I.T.A. NO. 508/KOL/2009 AND THE OTHER FILED BY THE REVENUE BEI NG ITA NO. 469/KOL/2009 ARE THE CROSS APPEALS, WHICH ARE DIREC TED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL S)-XXXIII, KOLKATA DATED 30.01.2009 FOR THE ASSESSMENT YEAR 2005-06. 2. FIRST WE TAKE UP THE APPEAL OF THE ASSESSEE FOR A.Y. 2005-06, WHEREIN THE FOLLOWING GROUNDS ARE RAISED:- (1) FOR THAT THE LD. CIT(APPEALS)-XXXIII MADE OBSER VATIONS WHICH ARE CONTRARY TO LAW AND FACTS. (2) FOR THAT THE LD. CIT(A)-XXXIII HAS ERRED IN HOL DING THAT THE EXPENDITURE OF RS.5,39,543/- MADE FOR FOREIGN TRAVEL WAS FOR BUSINESS PURPOSE WHICH IS CONTRARY T O FACT OF THE CASE. (3) FOR THAT THE LD. CIT(APPEALS)-XXXIII WAS WRONG IN HOLDING THAT THE DISALLOWANCE OF RS.54,529/- BEING 10% OF THE TOTAL EXPENSES MADE FOR TELEPHONE AND MOTOR CAR WAS NOT BUSINESS EXPENDITURE, WHICH IS CONTRADICTOR Y TO THE FACTS OF THE CASE. 3. AT THE TIME OF HEARING BEFORE US, NOBODY HAS APP EARED ON BEHALF OF THE REVENUE. THIS APPEAL OF THE ASSESSEE IS, THEREF ORE, BEING DISPOSED OF EX-PARTE QUA THE RESPONDENT-REVENUE AFTER HEARING THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE AND PERUSING THE RELEV ANT MATERIAL AVAILABLE ON RECORD. 4. GROUNDS NO. 1 & 4 RAISED BY THE ASSESSEE IN THIS APPEAL ARE GENERAL IN NATURE, WHICH DO NOT CALL FOR ANY SPECIFIC ADJUD ICATION. I.T.A. NO. 469/KOL./2009 ASSESSMENT YEAR: 2005-2006 & ITA NO. 508/KOL/2009 ASSESSMENT YEAR: 2005-2006 PAGE 3 OF 5 5. AS REGARDS THE ISSUE INVOLVED IN GROUND NO. 2 OF THE ASSESSEES APPEAL RELATING TO THE DISALLOWANCE OF RS.5,39,543/ - MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPE ALS) ON ACCOUNT OF FOREIGN TRAVEL EXPENSE, IT IS OBSERVED THAT THE ASS ESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOUND ON PERUS AL OF THE RELEVANT DETAILS FURNISHED BY THE ASSESSEE THAT THE EXPENSES OF RS.5,39,543/- CLAIMED BY THE ASSESSEE ON ACCOUNT OF FOREIGN TRAVE L EXPENSES WERE ACTUALLY INCURRED ON THE TRAVEL UNDERTAKEN BY THE R ELATIVES OF THE PARTNERS OF THE ASSESSEE-FIRM. ALTHOUGH THE ASSESSE E EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE SAID RELATIVES HAD UNDER TAKEN THE FOREIGN TRIPS FOR THE PURPOSE OF ITS BUSINESS, THE ASSESSING OFFI CER FOUND THAT THERE WAS NO DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE TO SU PPORT AND SUBSTANTIATE THE SAME. HE ACCORDINGLY TREATED THE F OREIGN TRAVEL EXPENSES CLAIMED BY THE ASSESSEE TO THE EXTENT OF RS.5,39,54 3/- AS PERSONAL EXPENSES AND DISALLOWED THE SAME. 6. ON APPEAL, THE LD. CIT(APPEALS) CONFIRMED THE DI SALLOWANCE MADE BY THE ASSESSING OFFICER ON THIS ISSUE OBSERVING THAT THE DETAILS FURNISHED BY THE ASSESSEE WERE NOT SUFFICIENT TO ESTABLISH THAT THE CONCERNED FOREIGN VISITS HAD BEEN UNDERTAKEN BY THE RELATIVES OF THE PARTNERS OF THE ASSESSEE-FIRM FOR BUSINESS PURPOSE. 7. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSE L FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE COPIES OF CERTAIN E- MAILS SENT BY THE ASSESSEE TO SHOW THAT EVEN THE RELATIVES OF THE PAR TNERS OF THE ASSESSEE- FIRM WERE INVOLVED IN THE FAMILY BUSINESS AND THE F OREIGN TRIPS WERE UNDERTAKEN BY THEM FOR THE BUSINESS OF THE ASSESSEE -FIRM. WE, HOWEVER, FIND OURSELVES IN AGREEMENT WITH THE AUTHORITIES BE LOW THAT THE SAID E- MAILS SENT BY THE ASSESSEE ARE NOT SUFFICIENT TO ES TABLISH THAT THE CONCERNED RELATIVES OF THE PARTNERS OF THE ASSESSEE -FIRM, WHO HAD UNDERTAKEN THE RELEVANT FOREIGN TRIPS, WERE ALSO IN VOLVED IN SOME I.T.A. NO. 469/KOL./2009 ASSESSMENT YEAR: 2005-2006 & ITA NO. 508/KOL/2009 ASSESSMENT YEAR: 2005-2006 PAGE 4 OF 5 OFFICIAL/ UNOFFICIAL CAPACITY IN THE BUSINESS OF TH E ASSESSEE-FIRM AND THE SAID FOREIGN TRIPS WERE UNDERTAKEN BY THEM FOR THE BUSINESS OF THE ASSESSEE-FIRM. IN OUR OPINION, THE DISALLOWANCE MAD E BY THE ASSESSING OFFICER ON THIS ISSUE WAS FULLY JUSTIFIED AND THE I MPUGNED ORDER OF THE LD. CIT(APPEALS) CONFIRMING THE SAME DOES NOT CALL FOR ANY INTERFERENCE. GROUND NO. 2 OF THE ASSESSEES APPEAL IS ACCORDINGL Y DISMISSED. 8. AS REGARDS THE ISSUE INVOLVED IN GROUND NO. 3 RE LATING TO THE DISALLOWANCE OF 10% OUT OF TOTAL MOTOR CAR EXPENSES AND TELEPHONE EXPENSES MADE BY THE ASSESSING OFFICER AND CONFIRME D BY THE LD. CIT(APPEALS), IT IS OBSERVED THAT NO RECORD IN THE FORM OF LOG BOOK OR CALL REGISTER, ETC. WAS MAINTAINED BY THE ASSESSEE TO ES TABLISH THAT THE EXPENSES CLAIMED ON ACCOUNT OF TELEPHONE AND MOTOR CAR ARE FULLY AND EXCLUSIVELY INCURRED FOR THE PURPOSE OF ITS BUSINES S. IN THE ABSENCE OF SUCH RECORD, THE DISALLOWANCE ON ACCOUNT OF PERSONA L ELEMENT IS VERY MUCH CALLED FOR AND HAVING REGARD ALL THE FACTS OF THE CASE, WE ARE OF THE VIEW THAT SUCH DISALLOWANCE MADE BY THE ASSESSING O FFICER AND CONFIRMED BY THE LD. CIT(APPEALS) TO THE EXTENT OF 10% OF THE TOTAL EXPENSES CLAIMED BY THE ASSESSEE IS QUITE FAIR AND REASONABLE. WE, T HEREFORE, FIND NO MERIT IN GROUND NO. 3 OF THE ASSESSEES APPEAL AND DISMIS S THE SAME. 9. AS REGARDS THE APPEAL OF THE REVENUE, WE HAVE AL READY NOTED THAT THERE WAS NOBODY APPEARED ON BEHALF OF THE REVENUE AT THE TIME OF HEARING BEFORE US. AS INFORMED BY THE LD. CIT (D.R. ), WHO WAS PRESENT IN THE COURT, LD SR. D.R. WAS TO ARGUE THIS MATTER BEF ORE THE TRIBUNAL BUT HE HAS NEITHER APPEARED NOR INTIMATED ANYTHING SHOWING HIS INTENTION TO SEEK ADJOURNMENT. THE CASUAL AND NEGLIGENT APPROACH OF THE LD. SR. D.R. CLEARLY SHOWS THAT THE REVENUE IS NOT SERIOUS TO PR OSECUTE THIS APPEAL FILED BEFORE THE TRIBUNAL. I.T.A. NO. 469/KOL./2009 ASSESSMENT YEAR: 2005-2006 & ITA NO. 508/KOL/2009 ASSESSMENT YEAR: 2005-2006 PAGE 5 OF 5 10. THE LAW ASSISTS THOSE WHO ARE VIGILANT AND NOT THOSE WHO SLEEP OVER THEIR RIGHTS. THIS PRINCIPLE IS EMBODIED IN THE WEL L KNOWN DICTUM VIGILANTIBUS, NON DORMIENTIBUS, JURA SUBVENIUNT. 11. CONSIDERING THE FACTS AND KEEPING IN MIND THE P ROVISIONS OF RULE 19(2) OF THE ITAT RULES AS WAS CONSIDERED IN THE CA SE OF CIT VS.- MULTIPLAN INDIA PVT. LTD. 38 ITD 320 (DEL.) AND THE JUDGMENT OF THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF ES TATE OF LATE TUKOJIRAO HOLKAR VS.- C.W.T. REPORTED IN 223 ITR 4 80, WE TREAT THIS APPEAL AS DISMISSED FOR NON-PROSECUTION. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE AS WELL A S THE APPEAL FILED THE REVENUE BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 9, 2015. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 9 TH DAY OF DECEMBER, 2015 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-52, KOLKATA, AAYAKAR BHAWAN DAKSHIN, 2, GARIAHAT ROAD (SOUTH), KOLKATA-700 068 (2) M/S. A & A INTERNATIONAL, 2, BEDIADANGA FIRST LANE, KOLKATA-700 039 (3) COMMISSIONER OF INCOME-TAX (APPEALS)- XXXIII, KOLKATA (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.