ACIT, New Delhi V. M/s. Delhi Tourism Transportation Development Corporation Ltd., New Delhi

ITA 4756/DEL/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69315 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 27-02-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 06-09-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR SUDHA KUMARI
• Assessee Lawyers: H P AGGARWAL; UDAY AGGARWAL CAS
• Keywords: Reasonable cause; Corroborative evidences
• Section: 43B; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.2814 & 4756/DEL/2012 ASSESSMENT YEARS : 2008-09 2009-10 DEPUTY COMMISSIONER OF VS. DELHI TOURISM & TPTN. CORPN. INCOME-TAX, CIRCLE 10(1), LTD., 18-A, DDA SC O NEW DELHI COMPLEX, DEFENCE COLONY, NEW DELHI PAN NO.AAACD 0169 J (APPELLANT) (RESPONDENT) APPELLANT BY : DR. SUDHA KUMARI, CIT-DR RESPONDENT BY : S/SHRI H.P. AGGARWAL & UDAY AGGARWAL, CAS. ORDER PER U.B.S. BEDI, JM: THESE TWO APPEALS OF THE DEPARTMENT EMANATE FROM THE SEPARATE ORDERS PASSED BY LEARNED CIT(A)-IV, NEW DE LHI DATED 04.03.2012 AND 01.06.2012 FOR ASSESSMENT YEARS 2008 -09 AND 2009- 10. 2. THESE APPEALS INVOLVE SOME COMMON POINTS, IDENT ICAL ISSUES AND WERE HEARD TOGETHER, THEREFORE, BEING DI SPOSED OF BY SINGLE ORDER FOR THE SAKE OF CONVENIENCE. I.T.A. NO.2814/D/2012 :A.Y. 2008-09 I.T.A. NO.2814-4756/DEL/2012 2 2.1 IN THIS APPEAL, BESIDES CHALLENGING D ELETION OF DISALLOWANCE OF RS. 3,74,78,548/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF EXCISE DUTY PAID IN ADVANCE, DEPARTMENT HAS ALSO CHALLENGED DELETION OF DISALLOWANCE OF RS. 2,05,81,518/- AND RS. 22,69,523/- MADE BY THE ASSESSING OFFICER ON ACCOUN T OF PROVISION FOR LEAVE ENCASHMENT AND PAYMENT IN FOREI GN CURRENCY RESPECTIVELY. 2.2 AS REGARDS FIRST ISSUE, ASSESSING OFFICE R MADE ADDITION OF RS. 3,74,78,548/- ON ACCOUNT OF EXCISE DUTY PAID BY THE ASSESSEE IN ADVANCE. THE ASSESSING OFFICER OBSERVE D THAT PROVISION OF INCOME TAX ACT DO NOT WARRANT TO ALLOW EXPENSES OF SUBSEQUENT YEAR UNTIL AND UNLESS DEBITED TO PROFIT AND LOSS AC COUNT OF THE YEAR IN WHICH IT HAS BEEN CLAIMED. SUCH ACTION OF THE A SSESSING OFFICER WAS CHALLENGED BY THE ASSESSEE IN FIRST APPEAL BEFO RE LEARNED CIT(A), WHILE REFERRING TO THE PROVISION OF SECTIO N 43B AND DELHI HIGH COURTS DECISION IN THE CASE OF CIT VS. MODIPO N LTD, (334 ITR 106) AND DCIT VS. GLAXO SMITHKLINE CONSUMER HEALTHC ARE LTD. 299 ITR (AT) 001 HAS CONCLUDED TO DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE AS PER PARA 6.3 OF THE OR DER AS UNDER:- 6.3 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS O F THE ASSESSING OFFICER AND THE SUBMISSIONS MADE BY THE L EARNED AR OF THE APPELLANT. THE ALLOWABILITY OF EXCISE DUTY PAI D IN ADVANCE HAS BEEN DISCUSSED BY VARIOUS COURTS. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. MODIPON LTD. (334 ITR 106) WHICH IS A VERY RECENT DECISION HAS CLEARLY HELD TH AT THE MISCHIEF WHICH IS SOUGHT TO BE CURED BY INTRODUCTION OF PROV ISION OF SECTION 43B OF THE INCOME-TAX ACT IS SUBSERVED BY T HE PAYMENT OF I.T.A. NO.2814-4756/DEL/2012 3 DUTY TO THE DEPARTMENT CONCERNED AND HAS HELD THAT THE ADVANCE EXCISE DUTY IS ALLOWABLE AS EXPENDITURE. FURTHER, IN THE CASE OF INCOME-TAX VS. GLAXO SMITHKLINE CONSUMER HEALTHCARE LTD. 299 ITR AT 001 (FIVE MEMBER-SB(TRIBUNAL), THE HONBLE TR IBUNAL HAS CLEARLY HELD THAT THERE IS NO REFERENCE TO ANY COND ITION TO ESTABLISH ACCRUAL OF LIABILITY FOR THE CLAIM OF D EDUCTION. ONLY ACTUAL PAYMENT IS INSISTED UPON. FURTHER, THE HON BLE TRIBUNAL HAS OBSERVED THAT IT IS NOT NECESSARY THAT THE ASSE SSEE MUST PROVE INCURRING OF A SPECIFIC LIABILITY UNDER ANY STATUTE REFERRED TO IN THE DIFFERENT CLAUSES OF SECTION 43B. IT MUST BE A N EXPENDITURE CONNECTED AND RELATED TO THE ASSESSEES BUSINESS DE DUCTIBLE U/S 28 OF THE ACT. IT SHOULD NOT BE A PROHIBITED ITEM TOTALLY UNRELATED TO THE BUSINESS OF THE ASSESSEE. FROM TH E AFORESAID, IT IS CLEAR THAT THE ADVANCE EXCISE DUTY SHALL BE TREA TED AS AN ALLOWABLE EXPENDITURE. THE AFORESAID VIEW HAS ALSO BEEN TAKEN BY THE HONBLE KOLKATA HIGH COURT IN THE CASE OF PA HARPUR COOLING TOWERS LTD. VS. CIT IN I.T.A. NO.2 OF 2004 DATED 15.07.2011. IN THE INSTANT CASE, THE CLAIM OF THE ASSESSEE IS RELATING TO EXCISE DUTY PAID FOR THE SUBSEQUENT FIN ANCIAL YEAR, I.E. FY 2008-09. THE FACT THAT ASSESSEE HAS PAID T HE EXCISE DUTY IN ADVANCE HAS NOT BEEN DOUBTED BY THE ASSESSING OF FICER IN THE ASSESSMENT ORDER. UNDER THE CIRCUMSTANCES, THE CAS E OF THE ASSESSEE IS CLEARLY COVERED BY THE DECISION OF THE HONBLE COURTS AND ITAT AS DISCUSSED SUPRA. THEREFORE, THE ASSESS ING OFFICER IS DIRECTED TO ALLOW THE CLAIM OF THE ASSESSEE. ACCOR DINGLY, THIS GROUND OF APPEAL IS ALLOWED IN FAVOUR OF THE ASSESS EE. 2.3 LEARNED CIT(A) FURTHER DEALT WITH THE ISSUE OF ADDITION OF ADVANCE EXCISE DUTY PAYMENT OF RS. 3,74,78,48/- IN TAXABLE INCOME ALTHOUGH IT WAS NOT DEBITED TO PROFIT AND LO SS ACCOUNT AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE HAS DECI DED THIS ISSUE IN FAVOUR OF THE ASSESSEE AS PER PARA 6.5 OF HIS ORDER AS UNDER:- 6.5 I HAVE CAREFULLY CONSIDERED THE CALCULATIONS M ADE BY THE ASSESSING OFFICER AT PAGE 9 OF THE ORDER AND /THE S UBMISSIONS MADE BY THE AR OF THE APPELLANT IN THIS REGARD. IT IS CLEAR FROM THE ABOVE, THAT THE ASSESSING OFFICER FOR THE PURPO SE OF COMPUTING THE TAXABLE INCOME HAS CONSIDERED PROFIT AS PER PROFIT AND LOSS ACCOUNT. THEREFORE, THE ADDITION ON ACCOU NT OF ADVANCE EXCISE DUTY WHILE CALCULATING THE TAXABLE INCOME CL EARLY AMOUNTS TO DOUBLE DISALLOWANCE BY THE ASSESSING OFFICER SIN CE THE ADVANCE EXCISE DUTY HAS NOT BEEN DEBITED BY THE ASSESSEE IN PROFIT AND I.T.A. NO.2814-4756/DEL/2012 4 LOSS ACCOUNT. THIS FACT HAS ALSO BEEN CONSIDERED B Y THE ASSESSING OFFICER AT PAGE 5 OF HIS ORDER. ACCORDINGLY, IT IS A CLEAR MISTAKE ON THE PART OF THE ASSESSING OFFICER AND, /THEREFOR E, THE CLAIM OF THE ASSESSEE IN THIS GROUND OF APPEAL IS ALLOWED. ACCORDINGLY, THIS GROUND OF APPEAL IS ALLOWED IN FAVOUR OF THE A SSESSEE. 2.4 AGGRIEVED BY THIS ACTION OF LEARNED CIT(A), DEPARTMENT HAS COME UP IN APPEAL. IT WAS STRONGLY CONTENDED THAT IN ORDER TO SEEK RELIEF ON ACCOUNT OF ADVANCE EXCIS E DUTY PAID, ASSESSEE NEEDS TO SHOW THE SAME IN THE PROFIT AND L OSS ACCOUNT WHICH IS FOUND TO BE NOT THERE, THEREFORE, ADDITION WAS RIGHTLY MADE BY THE ASSESSING OFFICER AND CIT(A) WAS NOT JUSTIFI ED IN DELETING THE SAME. IT WAS THUS, PLEADED FOR REVERSAL OF THE ORD ER OF LEARNED CIT(A) AND RESTORING THAT OF THE ASSESSING OFFICER. 2.5 LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THA T EXCISE DUTY PAID BY THE ASSESSEE IN ADVANCE HAS RIGHTLY BE EN ALLOWED TO BE DELETED BY THE LEARNED CIT(A) AS THE ISSUE IS COVER ED BY DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS . MARUTI SUZUKI INDIA LTD. REPORTED IN 2012-TIOL-1038-HC-DEL-IT IN WHICH SAME ISSUE HAS BEEN DEALT WITH BY THE JURISDICTIONAL HIG H COURT WHICH VIDE ORDER DATED 14 TH DECEMBER, 2012 HAS CLEARLY HELD THAT ADDITION IS NOT CALLED FOR AND DELETED THE SAME. THEREFORE, BESIDES RELYING UPON CIT VS. MODIPON LTD., (2011-TIOL-355-HC-DEL-IT ) AND PAHARPUR COOLING TOWERS LTD. VS. CIT (2011-TIOL-440-HC-KOL-I T) ORDER DATED 15 TH JULY, 2011 AR HAS RELIED ON MARUTI SUZUKI INDIA LT D.S CASE, IT WAS PLEADED FOR UPHOLDING THE ORDER OF LEARNED CIT( A). I.T.A. NO.2814-4756/DEL/2012 5 2.6 WE HAVE HEARD BOTH THE SIDES AND CONSIDERED THE MATERIAL ON RECORD AS WELL AS THE CASE LAW CITED AN D FIND THAT ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY JU RISDICTIONAL HIGH COURTS DECISION IN THE CASE OF CIT VS. MARUTI SUZU KI INDIA LTD. (SUPRA) AND HELD PORTION READS AS UNDER:- ++ THE TRIBUNAL HAD, IN A PREVIOUS YEAR, DISCUSSED THE ISSUE IN DETAIL AND HELD THAT DEDUCTION OF THE AMOUNT SHOULD BE ALLOWED IN THE YEAR IN WHICH IT IS ADJUSTED AGAINST LIABILI TY TO PAY EXCISE DUTY ON MANUFACTURED GOODS. ACCORDINGLY, IT IS PLE ADED THAT DEDUCTION SHOULD BE ALLOWED FOR THE SUM REPRESENTIN G PLA BALANCES ON THE LAST DAY OF THE PREVIOUS YEAR BUT A DJUSTED IN THIS YEAR. REVENUE AGREED WITH SUCH CONTENTION SINCE SU CH ADJUSTMENT AMOUNTS TO ACTUAL PAYMENT. EVEN THE COU NSEL FOR THE REVENUE HAS NO OBJECTION TO SUCH CONTENTION PROVIDE D SUCH DEDUCTION WAS NOT ALLOWED IN THE PRECEDING YEAR SIN CE DOUBLE DEDUCTION OF THE SAME AMOUNT CANNOT BE ALLOWED. SIN CE IT HAS BEEN HELD THAT ADVANCE PAYMENT DID NOT REPRESENT TH E PAYMENT OF EXCISE DUTY, THE QUESTION OF INCLUDING THE SAME IN THE CLOSING STOCK DOES NOT ARISE; ++IN THE PRESENT CASE, THE ASSESSEE HAD NO OPTION, BUT TO KEEP THE ACCOUNT, IN RESPECT OF EACH EXCISABLE PRODUCT. THERE WAS NO DOUBT IN THE LATTER PART OF THE MAIN RULE THAT THE ASSESSEE HAS NO CHOICE IN THE OBLIGATION, AND CANNOT REMOVE THE GOO DS MANUFACTURED BY IT, UNLESS SUFFICIENT AMOUNTS ARE K EPT IN CREDIT AND THE ASSESSEE SHALL PERIODICALLY MADE CREDIT IN SUCH ACCOUNT- CURRENT, BY CASH PAYMENT INTO THE TREASURY, SO AS T O KEEP THE BALANCES, IN SUCH ACCOUNT-CURRENT SUFFICIENT TO COV ER THE DUTY DUE ON THE GOODS INTENDED TO BE REMOVED AT ANY TIE, AND EVERY SUCH ASSESSEE SHALL PAY THE DUTY DETERMINED BY HIM FOR C ONSIGNMENT BY DEBIT TO SUCH ACCOUNT CURRENT BEFORE REMOVAL OF THE GOODS. THE REVENUES CONTENTION THAT THE AMOUNTS IN CREDIT ALSO RELATE TO GOODS NOT MANUFACTURED, AND THEREFORE, NOT RELAT ABLE TO ANY LIABILITY INCURRED IS, IN THE OPINION OF THIS COU RT, WITHOUT ANY BASIS. THE EXCESS CREDIT IS LIKEWISE ADJUSTED FOR T HE NEXT DAYS CLEARANCES. THE POINT TO BE UNDERLINED IS THAT THE RE IS NO CHOICE, AND THE AMOUNTS RELATE TO THE ASSESSEES DUTY LIABI LITY, FALLING WITHIN THE DESCRIPTION U/S 43B; ++SECTION 43B IN CLEAR TERMS PROVIDES THAT THE DEDU CTION CLAIMED BY THE ASSESSEE IN RESPECT OF ANY SUM PAID BY WAY O F TAX, DUTY, CESS OR FEE, SHALL BE ALLOWED ONLY IN COMPUTING THE INCOME I.T.A. NO.2814-4756/DEL/2012 6 REFERRED TO IN SECTION 28 OF THAT PREVIOUS YEAR IN WHICH IT WAS ACTUALLY PAID, IRRESPECTIVE OF THE PREVIOUS YEAR IN WHICH THE LIABILITY WAS INCURRED FOR THE PAYMENT OF SUCH SUM AS PER THE METHOD OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSE SSEE. FOR THE PURPOSE OF CLAIMING BENEFIT OF DEDUCTION OF THE SUM PAID AGAINST THE LIABILITY OF TAX, DUTY, CESS, FEE, ETC. , THE YEAR OF PAYMENT IS RELEVANT AND IS ONLY TO BE TAKEN INTO AC COUNT. THE YEAR IN WHICH THE ASSESSEE INCURRED THE LIABILITY T O PAY SUCH TAX, DUTY, ETC., HAS NO RELEVANCE AND CANNOT BE LINKED W ITH THE MATTER OF GIVING BENEFIT OF DEDUCTION U/S 43B. INS THIS VIEW OF THE MATTER, THE APPEAL DESERVES TO BE ALLOWED. THI S COURT ALSO NOTICES THAT THE SUPREME COURT HAS UPHELD THE VIEW W HICH ALLOWS ASSESSEES TO CLAIM CREDITS, SUCH AS MODVAT, ETC, F ALLING WITHIN THE DESCRIPTION OF LIABILITY PAID, TO ESCAPE THE MI SCHIEF OF SECTION 43B IN CIT VS. SHRI RAM HONDA POWER EQUIPMENT CORPOR ATION. AS A RESULT OF THE ABOVE DISCUSSION, THE FIRST QUESTIO N IS ANSWERED IN FAVOUR OF THE ASSESSEE, AND AGAINST THE REVENUE; THEREFORE, FOLLOWING THE ABOVE CONCLUSION AS D RAWN BY HONBLE HIGH COURT, WHICH IS FULLY APPLICABLE TO TH E FACTS OF THE CASE IN HAND, THEREFORE, ORDER OF LEARNED CIT(A) IS UPHELD AND APPEAL OF THE REVENUE ON THIS ISSUE IS DISMISSED IN VIEW OF BINDING PRECEDENT. 2.7 AS REGARDS SECOND ISSUE, SAME RELATES TO DELET ION OF DISALLOWANCE OF RS. 2,05,85,815/- ON ACCOUNT OF PROVISION FOR LEAVE ENCASHMENT. 2.8 ASSESSING OFFICER MADE THE IMPUGNED ADDITION W HICH RELATES TO THE PROVISION OF LEAVE ENCASHMENT BASED UPON ACTUARIAL VALUATION IN RESPECT OF LIABILITY FOR LEAVE ENCASHM ENT. ASSESSING OFFICER MADE THE DISALLOWANCE BY HOLDING THAT IT HA S NOT ACTUALLY BEEN PAID TILL THE DUE DATE FOR FILING OF THE RETUR N AND PROVISIONS OF SECTION 43B(F) CLEARLY MANDATES TO ALLOW SUCH EXPEN SES ONLY ON I.T.A. NO.2814-4756/DEL/2012 7 ACTUAL PAYMENT BASIS. THE ASSESSEE TOOK UP THE MAT TER IN APPEAL AND PLEADED BEFORE FIRST APPELLATE AUTHORITY THAT P ROVISIONS WERE MADE ON THE BASIS OF ACTUARIAL VALUATION DONE AND R ELIED UPON CALCUTTA HIGH COURT DECISION IN THE CASE OF EXIDE I NDUSTRIES LTD. 299 ITR 470 (CALCUTTA) WHICH HAS STRUCK DOWN THE PROVIS ION OF SECTION 43B(F) AS UNCONSTITUTIONAL AND FURTHER PLEADED THAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2005-06 AND 2006-07, LD. CIT(A) HAS HELD THAT LIABILITY ON ACCOUNT OF LEAVE ENCASHMENT IS AN ASCERTAINED LIABILITY AND IS AN ALLOWABLE EXPENDITURE. LEARNED CIT(A) WHILE CONSIDERING AND ACCEPTING THE PLEA OF THE ASSESSEE, WHILE FOLLOWING CALCUTTA HIGH COURTS DECISION AS CITED BY THE AR O F THE ASSESSEE, HAS CONCLUDED TO ALLOW THE CLAIM OF DEDUCTION ON TH IS GROUND AS PER PARA 7.2 OF HIS ORDER AS UNDER:- I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF T HE APPELLANT AND THE FINDINGS RECORDED BY THE ASSESSIN G OFFICER. I FIND THAT THIS ISSUE IS COVERED IN FAVOUR OF THE AP PELLANT BY THE ORDER OF THE HONBLE KOLKATA HIGH COURT IN CASE OF EXCIDE INDUSTRIES (292 ITR 470). BESIDES THIS, MY LD. PRE DECESSORS HAVE ALSO ALLOWED THE CLAIM OF THE ASSESSEE IN ASSESSMEN T YEARS 2005- 06 AND 2006-07. THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE ORDERS, I HOLD THAT THE APPELLANT IS ENTITLED TO TH E CLAIM OF RS. 2,05,81,518/- TOWARDS PROVISION OF LEAVE ENCASHMENT WHICH HAS BEEN MADE ON THE BASIS OF ACTUARIAL VALUATION O F THE LIABILITY. THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAI M OF DEDUCTION ON THIS GROUND. 2.9 AGGRIEVED BY THIS ORDER OF LEARNED CIT(A), DEP ARTMENT HAS COME UP IN APPEAL BEFORE THE TRIBUNAL TO PLEAD THAT BHARAT AND EARTH MOVERS DECISION OF THE APEX COURT IS NOT APP LICABLE WHICH INTERPRETED THE EARLIER PROVISION (NOT APPLICABLE N OW) AND SO FAR AS THE CALCUTTA HIGH COURT CASE IS CONCERNED, WHICH RE LIED THIS DECISION, SAME HAS BEEN STAYED BY HONBLE SUPREME C OURT BY I.T.A. NO.2814-4756/DEL/2012 8 RELYING ON WRITTEN SUBMISSIONS FILED IN THIS REGARD AND BY FILING COPY OF HONBLE SUPREME COURTS ORDER ON THE POINT OF PR OVISION FOR LEAVE ENCASHMENT ADDED BY THE ASSESSING OFFICER U/S 43B(F ) IT WAS MENTIONED THAT SECTION 43B WAS INSTEAD W.E.F. 01.06 .1984 WHEREAS BHARAT EARTH MOVERS CASE IS RELATED TO ASSESSMENT YEAR 1978-79 AND WHICH CANNOT BE APPLIED AND BY FILING COPY OF THE H ONBLE SUPREME COURTS ORDER DATED 8.5.2009. IT WAS PLEADED FOR R EVERSAL OF THE ORDER OF THE LEARNED CIT(A) AND RESTORING THAT OF T HE ASSESSING OFFICER. 2.10 LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF LEARNED CIT(A) AND PLEADED FOR CONFIRMATION OF T HE SAME. THE ASSESSEES COUNSEL FILED COPY OF ITAT ORDER IN ASSE SSEES OWN CASE FOR ASSESSMENT YEARS 2005-06 AND 2006-07 IN SUPPORT OF THE ORDER OF THE LEARNED CIT(A) ALONG WITH COPY OF THE ORDER OF BHARAT EARTH MOVERS CASE TO PLEAD FOR CONFIRMATION OF LD. CIT(A )S ORDER IN THIS REGARD. 2.11 WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MATERIAL ON RECORD WITH REGARD TO ISSUE RELATABLE TO PROVISI ON FOR LEAVE ENCASHMENT AND FIND THAT IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2005-06 AND 2006-07 THE MATTERS ON THIS ISSUE HAVE BEEN REMITTED BACK TO THE ASSESSING OFFICER IN I.T.A. NO .4378/D/2010 DATED 14.09.2012 AND IN I.T.A. NO.4892/D/09 DATED 1 8.2.2011, SO CONSIDERING THE ENTIRETY OF FACTS, CIRCUMSTANCES AN D MATERIAL ON RECORD IN THE LIGHT OF PRECEDENTS RELIED UPON, WE F IND IT JUST AND APPROPRIATE TO SET ASIDE THE ORDERS OF AUTHORITIES BELOW ON THIS ISSUE I.T.A. NO.2814-4756/DEL/2012 9 AND RESTORE IT BACK TO THE FILE OF ASSESSING OFFICE R FOR RE-DECIDING THE ISSUE AFRESH AFTER GIVING DUE OPPORTUNITY TO TH E ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. 2.12 AS REGARDS THIRD ISSUE SAME RELATES TO DELETI ON OF DISALLOWANCE OF RS. 22,09,523/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PAYMENT IN FOREIGN EXCHANGE. THE ASSESS ING OFFICER DEALT WITH THIS ISSUE IN PARA 9 PAGE 8 & 9 AS UNDER :- 9. DISALLOWANCE OF PAYMENT IN FOREIGN CURRENCIES: PERUSAL OF PARA-22(B) ALONG WITH ANNEXURE-V OF 3CD REPORT FORMING PART OF THE TAX AUDIT REPORT, IT REVEALS TH AT THE ASSESSEE HAS SHOWN AN AMOUNT OF RS. 22,69,523/- ON ACCOUNT OF EXPENDITURE MADE IN FOREIGN CURRENCIES. THE ASSESS EE, VIDE NOTE SHEET ENTRY DATED 21.12.2010, HAS ASKED TO PRODUCE DETAILS OF THE VISIT AND EXPENDITURE WITH JUSTIFICATION AS WHY THE WHOLE AMOUNT SHOULD NOT BE DISALLOWED AND ADDED BACK TO THE TAXA BLE INCOME OF THE ASSESSEE. THE ASSESSEE, VIDE ITS LETTER DATED 23.12.2010, HA S SUBMITTED AS UNDER:- A) THIS HAS REFERENCE TO TWO ANNEXURES IN TAX AUDIT R EPORT BEING QUESTIONED FOR. AS REGARD TO THE STATEMENT O F PAYMENT OF AROUND RS. 19.50 LACS, IT RELATED TO THE VARIOUS TOURISM MART AND FUNCTIONS HELD OUTSIDE INDIA WHERE DTTDC BEING A MEMBER ORGANIZATION PARTICIPATED WITH THE APPROVAL OF GOVT./CAS. ALL THE PAYMENT MADE AS ST ATED IN THE ANNEXURE RELATES TO THE TA/DA & AIRFARE EXPENDITURE ETC. INCURRED BY EMPLOYEES OF THE CORPO RATION WHO HAVE PARTICIPATED IN THE MART AND TOURISM FAIR FOR GOVT. OF NCT, DELHI AS A MEMBER STATE. IN FACT, AL L THESE PAYMENTS ARE NOT COVERED U/S 40(AI) AND TAX AUDITOR HAS INCORRECTLY REPORTED IN ITS AUDIT REPORT WHICH IS O NLY AN OPINION. THEREFORE, THESE SHOULD NOT BE DISALLOWED UNDER THE SAID PROVISION OF TAX LAW BEING NOT COVERED. B) THIS STATEMENT RELATES TO THE PAYMENT MADE FOR RS. 3.48 LACS OUTSIDE INDIA IN FOREIGN CURRENCY TO THE TOURI ST OFFICE I.T.A. NO.2814-4756/DEL/2012 10 OF GOVT. OF INDIA FOR OBTAINING THE PROMOTION IN TH E FAIR/WORLD TOURISM MART HELD IN OTHER COUNTRIES. A S SUCH NONE OF THESE ARE COVERED FOR TDS BEING EXEMPTED UND ER THE TAX LAW IN CONNECTION TO THE PAYMENT TO THE GOV T. AGENCIES. THESE OFFICES ARE MANAGED UNDER THE MIN. OF TOURISM AND EXTERNAL AFFAIRS, GOVT. OF INDIA. FOR DETAILS BILLS AND PAYMENT PROOF, YOU ARE REQUESTED TO ALLOW SOME MORE TIME PREFERABLE THREE TO FOUR DAYS TO FIND OUT FROM OLD RECORDS, IF OUR ABOVE SUBMISSION NOT ACCEPTED. THE SUBMISSIONS OF THE ASSESSEE WERE WELL CONSIDERED, BUT NOT FOUND TENABLE BECAUSE IT COMPLETELY FAILED TO P ROVIDE ANY CONCRETE DETAILS/BILLS/VOUCHERS/JUSTIFICATION. IN ITS REPLY, AS REDUCED AT THE SUB PARA B) ABOVE, THE ASSESSEE ITSE LF ACCEPTED THAT IT HAS NO BILLS/VOUCHERS/DETAILS REGARDING THE OVERSEAS TOURS. AS MATTER OF FACTS, THE ASSESSEE HAS NOT SUBMITTED ANY FURTHER DETAILS BY 27.12.2010. IT IS, THEREFORE, THE WHOLE AMOUNT OF RS. 22,69,523/- IS DISALLOWED, AND CONSIDERED AS THE IN COME OF THE ASSESSEE COMPANY. 2.13 LEARNED CIT(A) WHILE ALLOWING THE APPEAL OF T HE ASSESSEE ON THIS ISSUE HAS DEALT WITH THIS ISSUE AS PER PARA 10 TO 10.1 AND CONCLUDED AS PER PARA 10.2, WHICH READS AS UNDER:- 10.2 I HAVE CAREFULLY PERUSED THE OBSERVATIONS OF THE ASSESSING OFFICER AND THE SUBMISSIONS MADE BY THE A PPELLANT. I AGREE WITH THE CONTENTION OF THE APPELLANT THAT THE PAYMENTS MADE BY THE ASSESSEE ARE NOT COVERED BY THE PROVISI ON OF SECTION 40(A). THIS IS BECAUSE IN CASE OF TA/DA, IT IS CLE ARLY A PAYMENT TO EMPLOYEES AND WHICH IS NOT COVERED IN SECTION 40(A) . AND FURTHER, IN CASE OF PAYMENT TO GOVERNMENT, IT IS CL EAR THAT AS PER SECTION 196 NO TDS IS REQUIRED TO BE DEDUCTED. IN A DDITION TO THIS THE ASSESSING OFFICER HAS MADE A VERY VAGUE OBSERVA TION THAT THE ASSESSEE HAS NOT BEEN ABLE TO FILE ANY DETAILS/BILL S/VOUCHERS IN THIS REGARD. THIS IS BECAUSE THE TAX AUDITOR HAS R EPORTED THE SAID SUM BECAUSE THE ASSESSEE HAS FAILED TO DEDUCT TDS AND NOT BECAUSE THE EXPENSES CLAIMED ARE NON-GENUINE OR NOT RELATED TO THE BUSINESS OF THE ASSESSEE. THEREFORE, I AGREE WI TH THE CONTENTION OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE AND ACCORDINGLY DEL ETE THE ADDITION MADE ON THIS ACCOUNT. ACCORDINGLY, THIS G ROUND OF APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE. I.T.A. NO.2814-4756/DEL/2012 11 2.14 AGGRIEVED BY THIS ORDER, DEPARTMENT HAS COME UP IN THIS APPEAL AND IT WAS STRONGLY PLEADED THAT DISALLOWANC E MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PAYMENT MADE BY THE ASSESSEE IN FOREIGN CURRENCY AMOUNTING TO RS. 22,69,523/- ON THE GROUND THAT ASSESSEE COMPLETELY FILED TO PROVIDE ANY CONCRETE BILLS/VOUCHERS/JUSTIFICATION AND DISALLOWED THE SAM E WHEREAS AR OF THE ASSESSEE SUBMITTED BEFORE THE LEARNED CIT(A) TH AT PAYMENTS RELATED TO TA / DA WAS RS. 19,20,752/- WHEREAS PAYMENT MADE TO INDIAN TOURIST OFFICE (GOVERNMENT OF INDIA) IS RS. 3,48,571/- AND ASSESSING OFFICER HAS TAKEN THIS AMOUNT FROM THE TA X AUDIT REPORT AND ASSESSING OFFICER DISALLOWED THE SAME AS ASSESS EE WAS UNABLE TO PRODUCE ANY BILL/VOUCHERS/DETAILS IN THIS REGARD AN D SINCE PAYMENT WAS MADE TO THE EMPLOYEES SO EVERY PROCEDURE AS PRE VAILING FOR PAYMENT OF SUCH AMOUNTS TO THE EMPLOYEES MUST HAVE BEEN FOLLOWED, SO HIS CLAIM SHOULD BE ALLOWED BUT IT WAS SUBMITTED BY THE LEARNED DR THAT ASSESSING OFFICER HAS EVERY RIG HT TO ASK FOR ANY DETAILS OR SUPPORTING EVIDENCE TO SATISFY HIMSELF A BOUT GENUINENESS AND ACTUAL INCURRING OF SUCH EXPENDITURE WHICH THE ASSESSEE HAS FAILED TO DO SO. ASSESSING OFFICER WAS JUSTIFIED I N MAKING THE IMPUGNED ADDITION WHEREAS LEARNED CIT(A) IS NOT JUS TIFIED IN DELETING THE IMPUGNED ADDITION AS MADE BY THE ASSES SING OFFICER. IT WAS THUS PLEADED FOR REVERSAL OF THE ORDER OF LEARN ED CIT(A) AND RESTORING THAT OF THE ASSESSING OFFICER. I.T.A. NO.2814-4756/DEL/2012 12 2.15 LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE LEARNED CIT(A)S ORDER AND PLEADED THAT PAYMENT OF RS. 19,20,752/- WAS MADE TO THE EMPLOYEES WHEREAS PAYMENT OF RS. 3,48,571/- WAS MADE TO INDIAN TOURIST OFFICE, GOVERNMENT OF INDIA AND IN MAKING PAYMENT TO THE EMPLOYEES NORMS PRESCRIBED HAVE BEEN FOLLOWED, ALL NECESSARY DETAILS AND DOCUMENTS IN THIS REGARD, MIGHT HAVE BEEN FILED AND PAYMENT MIGHT HAVE BEEN MADE IN ACCORDANC E WITH PRESCRIBED RULES SO NO DISALLOWANCE COULD BE MADE A ND CIT(A) IS JUSTIFIED IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER WHOSE ACTION SHOULD BE CONFIRMED. 2.16 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RECORD AVAILABLE IN THE APPEAL FOLDER AND FIND THAT THOUGH ASSERTIONS HAVE BEEN MADE ABOUT FOLLOWING THE NORMS BUT DETAILS AS CALLED FOR BY THE ASSESSING OFFICER HAVE NOT BEEN P RODUCED IN ORDER TO SATISFY THE ASSESSING OFFICER WHO IS AUTHORIZED TO LOOK INTO SUCH RECORDS AND WITHOUT SHOWING REASONABLE CAUSE FOR NO T PRODUCING THEM, THE ASSESSEE WAS SUPPOSED TO SUBMIT NECESSARY DETAILS AS ASKED FOR. SINCE SUCH COMPLIANCE HAS NOT BEEN MADE SO WE FIND IT JUST AND APPROPRIATE TO SET ASIDE THE ORDERS OF AUT HORITIES BELOW ON THIS ISSUE AND RESTORE THE MATTER BACK ON THE FILE OF ASSESSING OFFICER WITH THE DIRECTION TO RE-DECIDE THE ISSUE A FRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. IT IS EXPECTED TH AT ASSESSEE WILL FURNISH ALL THE DETAILS AND DOCUMENTS BEFORE THE AS SESSING OFFICER TO JUSTIFY THE CLAIM OF ALLOWANCE. I.T.A. NO.2814-4756/DEL/2012 13 3. GROUND NO.4 IS GENERAL IN NATURE WHICH COMMENTS NO ADJUDICATION. 4. AS A RESULT, APPEAL OF THE ASSESSEE GETS PARTLY ACCEPTED FOR STATISTICAL PURPOSE. 4.1 AS REGARDS FOR APPEAL FOR ASSESSMENT YEAR 2009 -10, DEPARTMENT HAS RAISED TWO GROUNDS. FIRST GROUND IS RELATABLE TO PAYMENT OF ADVANCE EXCISE DUTY AND SECOND RELATABLE FOR PROVISION OF LEAVE ENCASHMENT. SINCE BOTH THE ISSUES ARE SAM E AS IN THE ASSESSMENT YEAR 2008-09, THEREFORE, OUR DECISION ON THESE ISSUES TAKEN FOR THAT YEAR WILL APPLY HERE TO THIS APPEAL. 5. AS A RESULT, APPEAL OF THE DEPARTMENT IS ACCEPT ED PARTLY FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 30.09.2013. SD./- SD./- ( T.S. KAPOOR ) ( U.B.S. BEDI ) ACCOUANTANT MEMBER JUDICIAL MEMBER DT. 30-09-2013 NS/SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-IV & XIII, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI).