GURU RAJENDRA METALS P.LTD, MUMBAI V. ACIT 5(1), MUMBAI

ITA 4767/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78710 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 03-04-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 18-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JKTLP DH LS SHRI R K SAHU
• Keywords: Gift

Judgement Text

M/S GURU RAJENDRA METALS PVT. LTD. 1 VK;DJ VIHYH; VF/KDJ.K TH U;K;IHB EQACBZ ESAA IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI JH JH JH JH FOT; IKY JKO] U;KF;D LNL; ,OA JH UJSUNZ DQEKJ FC YYS;K] YS[KK LNL; DS LE{K FOT; IKY JKO] U;KF;D LNL; ,OA JH UJSUNZ DQEKJ FCYYS ;K] YS[KK LNL; DS LE{K FOT; IKY JKO] U;KF;D LNL; ,OA JH UJSUNZ DQEKJ FCYYS ;K] YS[KK LNL; DS LE{K FOT; IKY JKO] U;KF;D LNL; ,OA JH UJSUNZ DQEKJ FCYYS ;K] YS[KK LNL; DS LE{K BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER VK;DJ VIYH LA[;K /ITA NO.4767/MUM/2012 FU/KKZJ.K O'KZ @ ASSESSMENT YEAR:- 2009-10 M/S GURU RAJENDRA METALS PVT. LTD. 302, MAJESTIC SHOPPING CENTRE, 144, GIRGAOM ROAD, MUMBAI -400004. VS. COMMISSIONER OF INCOME TAX (APPEAL)-9, ASST. COMMISSIONER OF INCOME TAX, 5(1), AAYAKAR BHAWAN, 5 TH FLOOR, MUMBAI. PAN: - AAA CG2 026K APPELLANT RESPONDENT ASSESSEE BY/ FU/KKZFJRH DH VKSJ LS NONE REVENUE BY/ JKTLP DH VKSJ LS SHRI R.K. SAHU ORDER PER VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) DATED 11.04.2011 FOR A.Y. 2009-10. THE ASSESSEE HAS RAISE D FOLLOWING GROUNDS IN THIS APPEAL:- (I) THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL)-9 F AILED TO ERRED IN TREATING DISALLOWING SALES PROMOTION OF RS. 5,04,98 8/- (II) THE COMMISSIONER OF INCOME TAX (APPEAL)-9 FAILED TO APPRECIATE THAT DETAILS OF SALES PROMOTION SUBMITTED WITH DOCUMENTA RY EVIDENCE. DATE OF HEARING 03.04.2014 DATE OF PRONOUNCEMENT 09.04.2014 M/S GURU RAJENDRA METALS PVT. LTD. 2 (III) THE COMMISSIONER OF INCOME TAX (APPEAL) -9 OUGHT TO HAVE APPRECIATED THE SALES PROMOTION EXPESN ARE WHOLLY & EXCLUSIVELY FOR BUSINESS PURPOSE ONLY. 2. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE WHEN THIS APPEAL WAS CALLED UPON REPEATEDLY FOR HEARING DESPITE THE NOTICES OF HEARING ISSUED TO THE ASSESSEE THROUGH RPAD. WE NOTE THAT EVEN ON THE LAST DATE OF HEARING NOBODY HAS APPEARED ON BEHALF OF THE ASSESSEE AND THE HEARING WAS ADJOURNED FOR TODAY WITH THE DIRECTION TO ISSUE THE NOTICE TO THE ASSES SE. THE NOTICE OF HEARING WAS ISSUE TO THE ASSESSEE BUT THERE IS NO RESPONSE FROM THE ASSESSEE TO PURSUE ITS APPEAL. ACCODINGLY WE PROPOSE TO HEAR AND DISPOSE O FF THIS APPEAL EX PARTE. 3. WE HAVE HEARD THE LD. DR AND CONSIDERED THE RELE VANT MATERIAL ON REOCRD. THE ONLY ISSUE RAISED IN THE APPEAL IS REGARDIN DI SALLOWANCE OF SALES PROMOTION EXPENSES. THE ASSESSEE IS A PRIVATE LIMITED COMPANY DEALING IN ALUMINIUM PRODUCTS. THE AO HAS DISALLOWED RS. 5,04,988/- TOWA RDS SALES PORMOTION EXPENSES ON THE GROUND THAT THESE EXPENSES WERE INC URRED FOR PURCHASE OF GIFT ITEMS IN THE SHAPE OF GOLD COINS, SILVER COINS, SIL VER IDOLS ETC. 4. ON APPEAL THE ASSESSEE CONTENDED BEFORE CIT(A) T HAT IN COMPARISON TO THE TURNOVER OF THE ASSESSEE THE SALE PROMOTION EXPENSE S ARE NOT UNREASONABLE OR EXCESSIVE, THEREFORE, THE DISALLOWANCE OF 30% OF TH E SALES PROMOTION WAS URGED AS UNJUSTIFIED. CIT(A) DID NOT ACCEPT THE CONTENTIO N OF THE ASSESSEE AND DECIDE THIS ISSUE IN PARA 5.1 AS UNDER:- 5.1 I HAYE CAREFULLY AND DISPASSIONATELY CONSIDER ED THE FACTS AND CIRCUMSTANCES OF THE CASE. IT IS NOT DISPUTED THAT THE APPELLANT HAS PURCHASED OF GOLD CHAINS / COINS;''SILVER COINS, SILVER IDOLS, GOLD PIECES, GOLD BARS(200 GM) /60 GM , CROC KERY ETC., THE APPELLANT HAS CLAIMED THAT THE PREVIOUSLY MENTIONED GOLD, SILVER ITEMS WERE GI VEN TO CERTAIN PERSONS. HOWEVER, NEITHER NAMES OF SUCH DONEES NOR THE SERVICES RENDERED BY S UCH RECIPIENTS WERE FURNISHED. THEREFORE, SUCH EXPENSES ON GIFTS AND EXPENSES ON P RESENTATION ARTICLES NEITHER BEARING NAME OF THE COMPANY NOR ITS LOGO CANNOT BE SAID TO BE MEANT FOR ADVERTISEMENT. HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS ALLANA SONS PVT LTD (1995) 216 ITR 690 (BOM) SUCH EXPENSES ARE NOT ALLOWABLE AS ADVERTISEMENT EX PENSES. HON'BLE BOMBAY HIQH COURT IN THE CASE OF CIT VS INDIAN RAYON CORPO RATION VS CIT (1998) 231 ITR M/S GURU RAJENDRA METALS PVT. LTD. 3 26 (BOM) HAS FUTHER CONFIRMED THE PREVIOUSLY MENTIONED DECIS ION GIVEN IN THE CASE OF CIT VS AI/ANA SONS PVT LTD (SUPRA) AND RULED THAT THE ONUS IS UPON THE ASSESSEE TO PRO VE THAT SUCH PRESENTATION ARTICLES WERE BEARING NAME OF THE COMPANY AND ITS LOGO ON THE GIFT ARTICLES. SIMILAR DECISION HAS BEEN GIVEN BY THE HON'BLE BOMBAY HIQH COURT IN THE CASE OF CIT VS GI LL & CO. PVT LTDL?FL01) 248 ITR 362 (BOM) AND IN THE CASE OF CIT VS WEST COAST PAPER MILLS LTD (2001) 250 ITR 506 [BOM). 5. AS IT IS CLEAR FROM THE FINDING OF THE CIT(A) TH AT THE ASSESSEE HAS FAILED TO FURNISH ANY RECORD TO SHOW THAT THESE GIFT ITEMS OF GOLD AND SILVER COINS AND IDOLS WERE GIVEN TO THE PERSONS WHO HAVE RENDERED T HE SERVICES HAVING BUSINESS CONNECTIONS WITH THE ASSESSEE. THE CIT(A) HAS FOLLO WED THE DECISIONS OF HONBLE JURISDICTIONAL HIGH COURT. IN THE ABSENCE OF ANY RE BUTTAL OR CONTRARY MATERIAL, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER S OF AUTHORITIES BELOW. 6. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT TODAY I.E 09 -04-2014 SD/- SD/- ( N.K. BILLAIYA ) ( VIJAY PAL RAO ) ( ACCOUNTANT MEMBER / YS[KK LNL; YS[KK LNL; YS[KK LNL; YS[KK LNL; ) (JUDICIAL MEMBER/ U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; ) MUMBAI DATED 09 -0-2014 SKS SR. P.S, COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, G BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI