Penta Insurance Corporate Agents Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 4820/DEL/2010

• Counselvise Citation: 482020114 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 25-01-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 03-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Assessee Lawyers: DD BANSALAR
• Keywords: Business expenditure
• Section: 142(1); 133(6); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI F BENC H BEFORE SMT. DIVA SINGH, JM & SHRI A.N. PAHUJA, AM ITA NO.4820/DEL/2010 ASSESSMENT YEAR:2006-07 M/S PENTA INSURANCE CORPORATE AGENTS PVT. LTD. C/O DD BANSAL ASSOCIATES, CAS, M-304, DHARMA APARTMENTS, 2, I.P. EXTN., DELHI-110092 V/S . INCOME TAX OFFICER, WARD-14(2),ROOM NO. 207,CR BUILDING, IP ESTATE NEW DELHI [PAN : AADCP 3189 K) (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI DD BANSAL,AR REVENUE BY SHRI B.R.R. KUMAR, DR DATE OF HEARING 25-01-2012 DATE OF PRONOUNCEMENT 03-02-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 03.11.2010 BY THE ASSESSEE AGA INST AN ORDER DATED 25 TH AUGUST, 2010 OF THE LEARNED CIT(A)-XVII, NEW DELHI , RAISES THE FOLLOWING GROUNDS:- 1. FOR THAT THE HONBLE CIT(A)-XVII, NEW DELHI ERR ED ON FACTS OF THE CASE AS WELL AS IN LAW IN UPHOLDING DISALLOWANCE OF ` `8,85,000/-, BEING 1/3 RD OF COMPANYS GENUINE BUSINESS EXPENDITURE ON SALARIES, TRAVELING AND CONVEYANCE. 2. FOR THAT THE HONBLE CIT(A)-XVII, NEW DELHI ERRE D ON FACTS OF THE CASE AS WELL AS IN LAW IN UPHOLDING DISALLOWANCE OF COMPANYS GENUINE BUSINESS EXPENDITURE OF ` `1,50,000/- PAID FOR OBTAINING CONTACT DETAILS AND OTHER VALUABLE INFORMATION REGARDING PROSPECTIVE CLIENTS FROM M/S MEENA INVESTMENTS, ITA NO.4820/DEL./2010 2 MUMBAI, DESPITE THE FACT THAT THE PAYMENT IN QUESTI ON WAS MADE BY ACCOUNT PAYEE CHEQUES. 3. FOR THAT THE HONBLE CIT(A)-XVII, NEW DELHI ERRE D ON FACTS OF THE CASE AS WELL AS IN LAW IN UPHOLDING DISALLOWANCE OF ` ` 45,000/- OUT OF COMPANYS GENUINE BUSINESS EXPENDITURE ON TELEPHONE EXPENSES OF EMPLOYEES, DESPITE THE COMPANYS SUBMISSION THAT IN VIEW OF ITS NATURE OF BUSINESS, SUCH EXPENDITURE IS ESSENTIAL. 2. FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE TH AT RETURN DECLARING INCOME OF ` ` 74,880/- FILED ON 30.11.2006 BY THE ASSESSEE, WAS T AKEN UP FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ISSUED ON 1.10 .2007. NONE RESPONDED TO THIS NOTICE NOR TO SUBSEQUENT NOTICES DATED 11.01.2008 A ND AGAIN ON 11.7.2008 ISSUED U/S 142(1) OF THE ACT. EVEN IN RESPONSE TO A SHOW CAUSE NOTICE ISSUED ON 11 TH AUGUST 2008, NONE RESPONDED. ACCORDINGLY, PENALTY OF ` ` 10,000/-U/S 271(1)(B) OF THE ACT WAS IMPOSED ON 14 TH NOVEMBER, 2008 AND SIMULTANEOUSLY A DETAILED SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESS EE, SEEKING TO COMPLETE ASSESSMENT U/S 144 OF THE ACT AND DISALLOW EXPENDI TURE CLAIMED UNDER DIFFERENT HEADS. IN RESPONSE , THE LD. AR ON BEHALF OF THE A SSESSEE APPEARED ON 20.11.2008 AND INTER ALIA, HE WAS DIRECTED TO FILE NAME AND ADDRESS OF THE EMPLOYEES WITH THEIR APPOINTMENT LETTERS AND FURNIS H DETAILS OF LEGAL AND PROFESSIONAL CHARGES, TRAVELING AND CONVEYANCE CHAR GES, ADVERTISING EXPENSES AND PRODUCE SALARY REGISTER AS ALSO BOOKS OF ACCOUN T. HOWEVER, THESE WERE NOT PRODUCED BEFORE THE AO. SINCE THE ASSESSEE DID NOT PRODUCE RELEVANT BOOKS OF ACCOUNT AND DETAILS OF EXPENSES, THE AO DISALLOWED 50% OF THE EXPENDITURE ON SALARY, TOUR/TRAVELING AND CONVEYANCE, RESULTING IN DISALLOWANCE OF ` `13,28,881/-. 2.1 THE AO FURTHER NOTICED THAT THE ASSESSEE CLAIM ED A PAYMENT OF ` 1,50,000/- TO M/S MEENA INVESTMENTS . TO A QUERY B Y THE AO, THE ASSESSEE REPLIED THAT THESE PAYMENTS WERE MADE FOR THE PURPO SE OF MAKING SURVEY AND PROVIDING THE LIST OF THE PROSPECTIVE CLIENTS. NO SURVEY REPORT, RELEVANT ITA NO.4820/DEL./2010 3 BILL/VOUCHERS AND EVEN BOOKS OF ACCOUNTS WERE PRO DUCED TO SUBSTANTIATE THE CLAIM MADE BY THE ASSESSEE. ACCORDINGLY, THE AO MA DE DISALLOWANCE OF ` `1,50,000/-. 2.2 AS REGARDS THE CLAIM FOR TELEPHONE EXPENSES OF ` ` 1,43,869/-, IN THE ABSENCE OF RELEVANT DETAILS AND BILLS, THE AO CONCL UDED THAT PERSONAL USE OF TELEPHONE WAS NOT RULED OUT. ACCORDINGLY, DISALLO WANCE OF ` ` 45,000/- WAS MADE. 3. ON APPEAL, THE LD. CIT(A) AFTER HAVING A REMAND REPORT FROM THE AO AND COMMENTS OF THE ASSESSEE THEREON, CONCLUDED AS UNDER:- 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSION M ADE BY THE APPELLANT AND PERUSED THE ASSESSMENT ORDER PASSED BY THE AO. IT IS NOTICED THAT THE APPELLANT HAS FAILED TO PRODUCE THE DETAILS CALLED FOR BY THE AO AT THE TIME OF ASSESSMENT PROCEEDINGS . EVEN AT THE STAGE OF THE REMAND REPORT ALL THE DETAILS WERE NOT PRODUCED BEFORE THE AO. IN ITS REJOINDER DATED 22.4.2010, THE LEAR NED AR REQUESTED FOR PERMISSION TO PRODUCE THESE VOUCHERS BEFORE ME FOR VERIFICATION. HOWEVER, HE FAILED TO EXPLAIN AS TO WHAT PREVENTED THE ASSESSEE TO PRODUCE THE SAME BEFORE THE ASSESSING OFFICER WHEN THE CASE WAS REMANDED BACK TO HIM. IT IS FURTHER SEEN THAT VIDE HIS SUBMISSION DATED 23.12.2009, THE LEARNED AR HAS SUBMITTED THAT IN VIEW OF THE GENERAL INCREASE IN SALARY LEVELS OF EMPLOYEES OVER THE YEARS AND HIGH EMPLOYEES ATTRITION FACED BY IT, THE COMPANY C OULD NOT SUSTAIN ITS BUSINESS AND VIRTUALLY CLOSED DOWN AFTER THE YE AR 2005-06. IT WAS FURTHER SUBMITTED THAT THE COMPANY WAS NOT LEFT WITH CONCERNED EMPLOYEES WHO WERE HANDLING ITS ACCOUNTS AND FINANC E MATTERS. THIS RESULTED IN INADEQUATE RESPONSE FROM THE COMPA NY TO THE AOS REQUIREMENTS OF PROVIDING DETAILS, DOCUMENTS ETC. THE LEARNED AR SUBMITTED COPIES OF FEW APPOINTMENT LETTERS AS WELL AS SALARY SHEETS. IT WAS SUBMITTED THAT THE BOOKS OF ACCOUNT S COULD NOT BE PRODUCED BEFORE THE ASSESSING OFFICER AT THE STAGE OF ASSESSMENT BECAUSE OF INADEQUATE OPPORTUNITIES. FROM THE PERU SAL OF VOUCHERS AND DETAILS OF TRAVELING AND CONVEYANCE EXPENSES, I T IS SEEN THAT THE APPELLANT HAS PRODUCED THE MONTHLY SHEETS CONTA INING GENERAL DESCRIPTION WHICH ARE ROUTINE IN NATURE AND CANNOT BE FULLY VERIFIED. THE VOUCHERS WHICH HAVE BEEN SUBMITTED DO NOT CONTA IN COMPLETE DESCRIPTION.IT MERELY STATES GENERAL ENTRIES LIKE T RAVELING AND CONVEYANCE. THE MONTHLY SHEETS WHICH WERE SUBMITTE D CONTAIN ONLY NAME OF THE EMPLOYEES, AMOUNT OF LOCAL CONVEYA NCE AND CONVEYANCE ALLOWANCE. UNDER THESE CIRCUMSTANCES, I AM OF THE VIEW THAT THE APPELLANT HAS NOT BEEN ABLE TO JUSTIF Y ALL THE ITA NO.4820/DEL./2010 4 EXPENDITURE CLAIMED BY IT. THEREFORE, THE AO WAS JU STIFIED IN MAKING THE DISALLOWANCE. HOWEVER, LOOKING TO THE NATURE O F THE BUSINESS AND FACTS AND CIRCUMSTANCES OF THE CASE, 50% DISALL OWANCE APPEARS TO BE ON HIGHER SIDE. CONSIDERING THE TOTA LITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDER ED OPINION THAT IT WILL MEET ENDS OF JUSTICE, IF DISALLOWANCE IS RE STRICTED TO 1/3 RD OF TOTAL EXPENDITURE CLAIMED BY THE APPELLANT. THEREF ORE, THE ASSESSING OFFICER IS DIRECTED TO RESTRICT THE DISAL LOWANCE OF ` ` 8,85,920/- IN PLACE OF ` `13,28,881/-. THE APPELLANT GETS RELIEF OF ` ` 4,42,961/- (13,28,881 8,85,920/-). THIS GROUND O F APPEAL IS PARTLY ALLOWED. . 5.2 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS O F LEARNED AR AND FINDINGS GIVEN BY THE ASSESSING OFFICER. IT IS SEEN THAT THE APPELLANT HAS NOT BEEN ABLE TO PROVIDE THE DETAILS OF SERVICES WHICH WAS RECEIVED FROM M/S MEENA INVESTMENT. IN ORDER T O CLAIMING EXPENDITURE AS BUSINESS EXPENDITURE, THE ASSESSEE H AS TO PROVE THAT THE SAME WAS LAID OUT WHOLLY AND EXCLUSIVELY F OR THE PURPOSES OF THE BUSINESS, THE SAME WAS NOT OF CAPITAL NATURE AND IT WAS NOT INCURRED FOR PERSONAL PURPOSES. THE APPELLANT HAS NOT SUBMITTED ANY EVIDENCE REGARDING WHAT INFORMATION WERE RECEIV ED FROM M/S MEENA INVESTMENT. NO CORRESPONDENCE MADE WITH THE ABOVE PARTY WAS SUBMITTED BY THE LEARNED AR. NO CONFIRMATION W AS PRODUCED FROM M/S MEENA INVESTMENT EITHER BEFORE THE ASSESSI NG OFFICER OR BEFORE ME. IN VIEW OF THE ABOVE DISCUSSION, I AM O F THE VIEW THAT THE ASSESSING OFFICER WAS FULLY JUSTIFIED IN DISALL OWING THE AMOUNT OF ` `1,50,000/-. THEREFORE, THE DISALLOWANCE MADE BY T HE ASSESSING OFFICER IS CONFIRMED. THIS GROUND OF APPEAL IS REJ ECTED. .. 6.2 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LEARNED AR. ON PERUSAL OF THE LEDGER ACCOUNT, IT I S SEEN THAT THE APPELLANT HAS NOT GIVEN ANY TELEPHONE NUMBER OR BIL L NUMBER. IT HAS BEEN MERELY MENTIONED THAT THE PAYMENT IS MADE TO DIFFERENT PERSONS ON ACCOUNT OF TELEPHONE EXPENSES. HOWEVER, NO EVIDENCE OF THESE EXPENSES HAVING BEEN INCURRED WAS PRODUCED EITHER BEFORE THE ASSESSING OFFICER OR BEFORE ME DURING TH E APPEAL PROCEEDINGS. UNDER THESE CIRCUMSTANCES, I DO NOT F IND ANY REASONS TO INTERFERE IN THE DISALLOWANCE MADE BY THE ASSESS ING OFFICER. THEREFORE, THE DISALLOWANCE MADE BY THE ASSESSING O FFICER IS CONFIRMED. THIS GROUND OF APPEAL IS REJECTED. ITA NO.4820/DEL./2010 5 4. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A).THE LD. AR ON BEHALF OF THE ASSESSEE WHILE CARRYING US THROUGH PAGES 33 AND 34 OF THE PAPER BOOK CONTENDED THAT NEITHER THE AO NOR THE LD. CIT(A) MADE ANY ADVERSE OBSERVATIONS IN RES PECT OF DISALLOWANCE OF SALARY. WHILE REFERRING TO PAGE 99 AND 100 OF THE PAPER BOOK, THE LD. AR POINTED OUT THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOLD ING THE DISALLOWANCE OF SALARY AND EXPENSES OUT OF TOUR AND TRAVELING. INTER ALIA , THE LD. AR RELIED UPON DECISION DATED 28 TH DECEMBER, 2011 OF THE ITAT IN THE CASE OF AMRAPALI INTERNATIONAL VS. ACIT DELHI TRIBUNAL PLACED AT 171 TO 173 OF THE PA PER BOOK. AS REGARDS THE DISALLOWANCE OF ` 1,50,000/-, THE LD. AR SUBMITTED THAT THE ASSESSEE PRODUCED RELEVANT BILLS & DETAILS OF TDS . SINCE THE AMOUNT WAS PAID FOR HAVING INFORMATION OF THE PROSPECTIVE CUSTOMERS, THE LD. CIT(A) WAS NO T JUSTIFIED IN UPHOLDING THE DISALLOWANCE. TO A QUERY BY THE BENCH, THE ASSESSE E REPLIED THAT THERE IS NO CORRESPONDENCE OR EVIDENCE REGARDING RECEIPT OF INF ORMATION OF THE PROSPECTIVE CUSTOMERS NOR ANY CONFIRMATION FROM M/S MEENA INVES TMENTS. REGARDING TELEPHONE EXPENSES, THE LD. SUBMITTED THAT SIMILAR CLAIM HAD BEEN ALLOWED IN PRECEDING YEAR AND SUGGESTED THAT A REASONABLE DISA LLOWANCE MAY BE MADE. 4.1. ON THE OTHER HAND, THE LD. DR WHILE REFERRING TO PAGE 33, 100 TO 104 OF THE PAPER BOOK SUBMITTED THAT SINCE THE ASSESSEE DID NOT PRODUCE RELEVANT DETAILS OF SALARY AND TOUR, TRAVELLING/CONVEYANCE A ND BILLS/VOUCHERS BEFORE THE AO IN THE ASSESSMENT OR REMAND PROCEEDINGS NOR EVEN BE FORE THE LD. CIT(A), THE LATTER WAS JUSTIFIED IN UPHOLDING THE DISALLOWANCE. AS REGARDS THE DECISION RELIED UPON BY THE LD AR, THE LD. DR WHILE CARRYING US THR OUGH THE SAID ORDER OF THE ITAT CONTENDED THAT NOWHERE IN THE GROUNDS OF APPEAL BEF ORE THE ITAT, THE ISSUE OF ANY DISALLOWANCE ON ACCOUNT OF SALARY OR EXPENSES T OWARDS TOUR & TRAVELLING WAS RAISED IN THAT CASE. IN THE ABSENCE OF ANY BOOKS OF ACCOUNT, RELEVANT DETAILS ETC., THE LD. CIT(A) WAS JUSTIFIED IN MAKING A REASONABLE DISALLOWANCE. AS REGARDS DISALLOWANCE OF ` 1,50,000/- PAID TO M/S MEENA INVESTMENTS, THE LD. DR CONTENDED THAT IN THE ABSENCE OF ANY EVIDENCE, THE AMOUNT WAS RIGHTLY ITA NO.4820/DEL./2010 6 DISALLOWED BY THE AO AND UPHELD BY THE LD. CIT(A). AS REGARDS TELEPHONE EXPENSES, THE LD. DR SUPPORTED THE FINDINGS OF THE LD. CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE FACTS OF THE CASE. WE FIND THAT THOUGH THE AO ALLOWED SUFFICIEN T OPPORTUNITY TO THE ASSESSEE RIGHT SINCE 11.1.2008 UNTIL 20.11.2008 IN TERMS OF NOTICES ISSUED U/S 143(2) & 142(1) OF THE ACT, THE ASSESSEE DID NOT SUBMIT THE RELEVANT DETAILS DESIRED BY THE AO NOR PRODUCED RELEVANT VOUCHERS/BILLS OR EVEN BOO KS OF ACCOUNTS . EVEN DURING THE REMAND PROCEEDINGS, THE ASSESSEE PRODUCE D ONLY BOOKS OF ACCOUNTS BUT DID NOT PRODUCE RELEVANT BILLS OR VOUCHERS AS K ED FOR BY THE AO. THE REMAND REPORT DATED 8/13.4.2010 OF THE AO REVEALS AS UNDE R:- THE AR OF THE ASSESSEE WAS ASKED TO PROVIDE THE BO OKS OF ACCOUNTS ALONG WITH VOUCHERS, DETAILS AS ASKED DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS. IN RESPONSE, THE AR HAS PRO DUCED THE BOOKS OF ACCOUNT FOR VERIFICATION ALONG WITH VOUCH ER FILE. ON EXAMINATION OF BOOKS OF ACCOUNTS THE AR HAS BEEN AP PRISED WITH THE FACTS THAT VOUCHERS WERE NOT DULY SUPPORTED WIT H DETAILS. IT HAS ALSO BEEN NOTICED THAT ON PERUSAL OF CASH BOOK THAT SOME ENTRIES WERE MADE IN THE CASH BOOK BUT VOUCHERS WERE NOT AV AILABLE IN THE VOUCHER FILE. THIS WAS CONFRONTED TO THE AR OF THE ASSESSEE. THE COPY OF THE REPLY FILED BY THE ASSESSEE IS ENCLOSED FOR YOUR KIND PERUSAL. ON GOING THROUGH THE REPLY FILED, IT IS NOTICED THA T THE AR HAS STATED THAT VOUCHER SHOWN. IN THIS REGARD IT IS SU BMITTED THAT I HAVE SPECIFICALLY STATED THAT NO VOUCHER WERE FOUND IN T HE VOUCHER FILE BUT I DO NOT KNOW HOW THE AR HAS SAID THAT VOUCHER SHOWN. REGARDING TRAVELING AND CONVEYANCE THE VOUCHER PROD UCED WERE NOT SUPPORTED WITH ANY DETAILS SUPPORTING DOCU MENTS. IT CONTAINS ONLY THE AMOUNT PAID WITH LIST BUT NO DETA ILS IN RESPECT OF PLACE OF VISIT, PURPOSE OF VISIT, MODE OF TRANSPORT ETC. REGARDING SALARY PAID, THE AR ASKED TO PRODUCE THE COPIES OF APPOINTMENT LETTERS TO VERIFY CORRECTNESS OF THE CLAIM OF SALAR Y, LETTERS TO SOME OF THE EMPLOYEES WERE ISSUED CALLING CONFIRMATION AS T O WHETHER THEY HAVE EVER WORKED FOR THE ORGANIZATION. OUT OF THE SEVEN LETTERS ISSUED ONLY TWO HAS CONFIRMED. REST OF THE LETTERS WERE EITHER RECEIVED BACK AS UNSERVED OR NO REPLY HAS BEEN RECE IVED SO FAR. THIS FACT WAS ALSO CONFRONTED TO THE AR. THE REPLY FILED BY THE ASSESSEE IS ENCLOSED. ITA NO.4820/DEL./2010 7 5.1 AFTER CONSIDERING THE REMAND REPORT AND COMMENTS OF THE ASSESSEE THEREON, THE LD. CIT(A) REDUCED THE DISALLOWANCE ON ACCOUNT OF SALARY AS ALSO TRAVELLING AND CONVEYANCE TO 1/3 RD OF THE TOTAL EXPENSES. WE FIND THAT BEFORE THE LD. CIT(A), THE ASSESSEE CONTENDED THAT IN ORDER T O ATTRACT BUSINESS, THEY EMPLOYED MORE PERSONS AND AS A RESULT, EXPENSES TOW ARDS SALARY INCREASED BY 72.3% IN THE YEAR UNDER CONSIDERATION AS AGAINST I NCREASE OF 66.5% IN THE RECEIPTS. IT WAS FURTHER SUBMITTED THAT IN VIEW OF GENERAL INCREASE IN SALARY LEVELS IN THE INDUSTRY, THE ASSESSEE COULD NOT SUSTAIN THE BUSINESS AND ACCORDINGLY, CLOSED DOWN. THOUGH FIVE EMPLOYEES DID NOT RESPOND TO THE NOTICE ISSUED BY THE AO U/S 133(6) OF THE ACT, THE ASSESSEE SUBSEQUE NTLY SUBMITTED CONFIRMATION OF THESE EMPLOYEES. THE LD. CIT(A),WITHOUT TAKING C OGNIZANCE OF THESE FACTS, UPHELD THE DISALLOWANCE ON ACCOUNT OF SALARY TO THE EXTENT OF 1/3 RD OF THE TOTAL SALARY. PAYMENTS OF SALARIES AND EMPLOYMENT OF STAFF ARE T HE PREROGATIVES OF A BUSINESSMAN AND IF HE FEELS THAT EMPLOYEES SHOULD BE PAID WELL SO AS TO GET OPTIMUM PRODUCTIVITY IT COULD ONLY BE CONSIDERED A S A COMMERCIALLY PRUDENT DECISION. THE GENUINENESS OF EXPENDITURE UNDER THE SALARY HAS NOWHERE BEEN DOUBTED. IN ANY CASE, IN THE ABSENCE OF ANY SPECIFI C DEFICIENCY , WE ARE OF THE OPINION THAT DISALLOWANCE OUT OF SALARY EXPENSES W AS NOT JUSTIFIED , PAYMENT IN THE YEAR UNDER CONSIDERATION BEING IN COMMENSURATE WITH CORRESPONDENCE RECEIPTS VIS-A-VIS RESULTS OF THE PRECEDING YEAR, A CCEPTED BY THE AO. 5.2 REGARDING DISALLOWANCE OUT OF TOUR AND TRAV ELLING/CONVEYANCE EXPENSES, THE LD. CIT(A) ON A PERUSAL OF VOUCHERS AND DETAILS OF TRAVELING AND CONVEYANCE EXPENSES, CONCLUDED THAT EXPENSES WERE NOT FULLY V ERIFIABLE SINCE THE VOUCHERS PLACED BEFORE HIM DID NOT CONTAIN COMPLETE DESCRIPT ION. IN THESE CIRCUMSTANCES, ESPECIALLY WHEN THE LD. AR DID NOT PLACE ANY MATER IAL BEFORE US SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER, WE ARE O F THE OPINION THAT DISALLOWANCE SUSTAINED BY THE LD. CIT(A) TO THE EXTENT OF 1/3 RD OF THE EXPENSES UNDER THE HEAD TOUR AND TRAVELLING IS REASONABLE. 5.3 IN VIEW OF THE FOREGOING, GROUND NO.1 IN THE APPEAL IS PARTLY ACCEPTED. ITA NO.4820/DEL./2010 8 6. AS REGARDS DISALLOWANCE OF ` `1,50,000/-, THE ASSESSEE DID NOT SUBMIT A COPY OF SURVEY REPORT OR RELEVANT BILLS/VO UCHERS DESIRED BY THE AO. EVEN BEFORE THE LD. CIT(A),THE ASSESSEE DID NOT SUBMIT A NY EVIDENCE REGARDING PURPOSE OF PAYMENT MADE TO M/S MEENA INVESTMENTS NO R ANY INFORMATION OR CORRESPONDENCE. EVEN WHEN A SPECIFIC QUERY WAS RAIS ED BY US, THE LD. AR DID NOT PLACE BEFORE US ANY MATERIAL, EVIDENCING THAT EXPEN DITURE WAS INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. IN THE SE CIRCUMSTANCES, ESPECIALLY WHEN THERE IS NO MATERIAL TO SHOW THAT THERE IS A C OMMERCIAL EXPEDIENCY OR BUSINESS NECESSITY IN INCURRING THE AFORESAID EXPE NDITURE, WE FIND NO ERROR OR LEGAL INFIRMITY IN THE ORDER OF THE LD. CIT(A).CONS EQUENTLY, GROUND NO.2 IN THE APPEAL IS DISMISSED. 7. REGARDING TELEPHONE EXPENSES, LEARNED CIT(A ) FOUND THAT THE ASSESSEE NEITHER FURNISHED TELEPHONE NUMBER OR EVEN BILL NUM BER IN SUPPORT OF EXPENDITURE ON TELEPHONES. EVEN BEFORE US SITUATION DID NOT IMP ROVE NOR THE LD. AR PLACED BEFORE US ANY EVIDENCE IN SUPPORT OF THESE EXPENS ES . SINCE THE LD. AR DID NOT REFER US TO ANY MATERIAL WARRANTING INTERFERENCE WI TH THE FINDINGS OF THE LD. CIT(A) WHILE PERSONAL USE OF TELEPHONE BY THE DIRECTORS OF THE ASSESSEE AND THEIR FAMILY MEMBERS OR STAFF HAS NOT BEEN DENIED NOR IT WAS CLAIMED THAT THEY HAD INDEPENDENT TELEPHONES FOR PERSONAL USE, IN OUR OP INION, DISALLOWANCE SUSTAINED BY THE LD. CIT(A) IN RESPECT OF THE EXPENSES ON T ELEPHONES IS REASONABLE . THEREFORE, GROUND NO. 3 IN THE APPEAL IS REJECTED. 8. NO OTHER SUBMISSION OR ARGUMENT WAS MADE BEFO RE US. 9. IN THE RESULT, APPEAL IS PARTLY ALLOWED. SD/- SD/- ( DIVA SINGH ) ( A.N. PAHUJA ) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NS ORDER PRONOUNCED IN OPEN COURT ITA NO.4820/DEL./2010 9 COPY OF THE ORDER FORWARDED TO :- 1.M/S PENTA INSURANCE CORPORATE AGENTS PVT. LTD. C/ O DD BANSAL ASSOCIATES, CAS, M-304, DHARMA APARTMENTS, 2, I.P. EXTN., DELHI- 92 2. INCOME TAX OFFICER, WARD-14 (2), NEW DELHI. 3. CIT CONCERNED. 4. CIT(A)-XVII, NEW DELHI 5. DR, ITAT,F BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI