Indian Metals and Ferro Alloys Ltd, Bhubaneswar V. ACIT, Bhubaneswar

ITA 521/CTK/2013

• Counselvise Citation: 52122114 RSA 2013
• Duration Of Justice: 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 19-11-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P K DASH
• Keywords: Business expenditure; Corroborative evidences
• Section: 43B; 37(1); 28; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH, CUTTACK BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 521/CTK/2013 : (ASST. YEAR : 2009 - 10) INDIAN METAL AND FERRO ALLOYS LTD., IMFA BUILDING, BOMIKHAL, RASULGARH, BHUBANESWAR 751010 (APPELLANT) VS. ASST. COMMISSIONER OF INCOME TAX CIRCLE - 2(1), BHUBANESWAR, ODISHA (RESPONDENT) PAN : AAACI4818F ASSESSEE BY : SACHIT JOLLY REVENUE BY : P.K. DASH, DR DATE OF HEARING : 01/05/2014 DATE OF PRONOUNCEMENT : 13 /06/2014 O R D E R PER P.K. BANSAL : 1. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - II, BHUBANESWAR DT. 26.6.2013 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: 1. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER (AO) IN DISALLOWING DEDUCTION OF RS.6,29,11,949/ - BY INVOKING SECTION 43B OF THE ACT, WITHOUT APPRECIATING THAT THE SAID SUM REPRESENTED DEPOSIT OF ELECTRICITY DUTY IN A DESIGNATED NON - LIEN BANK ACCOUNT AS PER THE DIRECTIONS OF THE HONBLE ODISHA HIGH COURT. 1.1 THAT IN HOLDING AS AFORESAID, THE CIT(A) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT THE LIABILITY HAVING CRYSTALLIZED AND DISCHARGED BY THE APPELLANT, SECTION 43B OF THE ACT COULD NOT HAVE BEEN INVOKED. 2. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER (AO) IN DISALLOWING DEDUCTION OF RS.31,16, 1 76, BEING 20% OF EXPENDITURE INCURRED ON EXPORT PROMOTION EXPENSES [FOREIGN TRAVELLING OF DIRECTORS] ON THE ERRONEOUS GROUND THAT THE APPELLANT HAD NOT SUBMITTED COMPLETE DETAILS OF THE EXPENSES INCURRED ON FOREIGN TRAVELS OF DIREC TORS AND THAT THE SAME WAS NOT RELATED TO THE BUSINESS OF THE APPELLANT. 2 ITA NO. 521/CTK/2013 (ASST. YEAR : 2009 - 10) 2.1 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN HOLDING THAT THE APPELLANT HAD FAILED TO PRODUCE THE ITINERARIES OF THE FOREIGN TOURS UNDERTAKEN BY THE DIRECTORS TO JUSTIFY THAT TH E SAME HAD BEEN UNDERTAKEN WHOLLY AND EXCLUSIVELY FOR THE BUSINESS OF THE APPELLANT COMPANY. 2.2 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT ANY EXPENDITURE INCURRED FOR THE PURPOSE OF EXPLORING NEW BUSINESS OPPORTUNITIES IN THE EX ISTING LINE OF BUSINESS OF THE APPELLANT IS REVENUE IN NATURE AND ADMISSIBLE BUSINESS EXPENDITURE . 2. GROUND NO. 1 RELATES TO THE ISSUE REGARDING CLAIM OF DEDUCTION BY THE ASSESSEE IN RESPECT OF RS.6,29,11,949/ - REPRESENTING DEPOSIT OF ELECTRICITY DUTY A S PER THE DIRECTIONS OF THE HON'BLE ODISHA HIGH COURT. 2.1 THE BRIEF FACTS RELATING TO THIS GROUND ARE THAT THE AO NOTED THAT THE ASSESSEE HAD DEBITED EXPENDITURE IN RESPECT OF ELECTRICITY DUTY. ON EXAMINATION OF THE DETAILS OF THE ELECTRICITY IT WAS N OTED THAT THE ASSESSEE HAS NOT MADE THE PAYMENT TO THE GOVERNMENT AND THE ELECTRICITY DUTY DEMANDED BY THE GOVERNMENT GOT LOCKED UP IN DISPUTE BETWEEN THE ASSESSEE AND THE GOVERNMENT. EVENTUALLY, THE ASSESSEE HAD TO DEPOSIT THE SAID AMOUNT IN A DESIGNATED NO - LIEN BANK ACCOUNT ON THE ORDER OF THE HON'BLE ODISHA HIGH COURT. THE AO DISALLOWED THE SAID AMOUNT U/S 43 B OF THE INCOME TAX ACT. WHEN THE MATTER WENT BEFORE CIT(A), CIT(A) CONFIRMED THE ORDER OF THE AO. 2.2 THE LD. AR BEFORE US VEHEMENTLY CONTE NDED THAT THE ASSESSEE WAS PAYING ELECTRICITY DUTY TO THE GOVERNMENT @ 6 PAISE/UNIT BUT SUBSEQUENTLY THE GOVERNMENT HAD INCREASED THE RATE. THE ASSESSEE HAD TO CHALLENGE THE ACTION OF THE GOVERNMENT BY FILING A WRIT UNDER ARTICLE 226 OF THE CONSTITUTION O F INDIA BEING WRIT PETITION NO. 5413 OF 2005 CHALLENGING THE VIRES OF THE LETTERS ISSUED BY THE GOVERNMENT DT. 14.5.200 4 MAKING THE DEMAND BY INCREASING THE ELECTRICITY CHARGES BY 14 PAISE/UNIT. THE HON'BLE HIGH COURT VIDE ITS INTERIM 3 ITA NO. 521/CTK/2013 (ASST. YEAR : 2009 - 10) ORDER DT. 21.4.2005 DIRECTED THE GOVERNMENT NOT TO TAKE ANY COERCIVE ACTION AGAINST THE ASSESSEE IN TERMS OF LETTER DT. 14.5.2004 PROVIDED THE ASSESSEE GOES ON PAYING THE ELECTRICITY DUTY @ 6 PAISE AND KEEPS THE DIFFERENTIAL AMOUNT @ 14 PAISE IN A SEPARATE NO - LIEN ACCOUNT T ILL THE NEXT DATE. THE ASSESSEE WAS ASKED TO DEPOSIT THE DIFFERENTIAL AMOUNT FOR THE MONTH OF APRIL, 2005 BY 7 TH MAY AND THE MONTHLY DIFFERENTIAL ELECTRICITY DUTY BE DEPOSITED BY 7 TH OF EACH SUCCEEDING MONTH. SUBSEQUENTLY, THE PETITION WAS DISPOSED OFF B Y THE HON'BLE HIGH COURT AGAINST WHICH THE ASSESSEE WENT IN APPEAL BEFORE THE HON'BLE SUPREME COURT BY WAY OF SLP. THE HON'BLE SUPREME COURT MODIFIED THE INTERIM ORDER DT. 1.10.2010 IN THE FOLLOWING MANNER : PENDING THE FINAL DISPOSAL OF THE APPEAL, THE DEPARTMENT MAY CONTINUE TO RAISE DEMANDS AGAINST THE APPELLANTS SO THAT THESE DO NOT GET TIME - BARRED. HOWEVER, THE APPELLANTS SHALL CONTINUE TO PAY THE ADMITTED AMOUNT OF DEMAND FOR THE SUCCEEDING MONTHS IN THE SAME MANNER THEY HAVE BEEN PAYING IN THE PA ST. INSOFAR AS THE DISPUTED AMOUNT IS CONCERNED, THE SAME SHALL BE PUT IN AN ESCROW ACCOUNT. ON THE APPELLANTS COMPLYING WITH THIS ORDER, NO COERCIVE STEPS SHALL BE TAKEN BY THE STATE TO RECOVER THE DIFFERENTIAL AMOUNT TILL FURTHER ORDERS WITHOUT THE LEAVE OF THIS COURT. COPY OF THE FINAL ORDER OF THE HON'BLE ODISHA HIGH COURT AS WELL AS THE ORDER DT. 6.5.2010 AND THE INTERIM ORDER DT. 1.10.2010 PASSED BY THE HON'BLE SUPREME COURT WERE NOT FILED BEFORE US. ON THE BASIS OF THE INTERIM ORDER OF THE HO N'BLE HIGH COURT IT WAS CONTENDED THAT THE ASSESSEE HAS PAID DIFFERENTIAL ELECTRICITY DUTY IN THE DESIGNATED NO - LIEN BANK ACCOUNT IN THE STATE BANK OF INDIA. THE AMOUNT SO DEPOSITED DURING THE IMPUGNED ASSESSMENT YEAR WAS RS.6,29,11,949/ - . THE LD. AR CONTENDED THAT SINCE THE AMOUNT HAS ACCRUED DURING THE YEAR AND ASSESSEE WAS FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING, THE ASSESSEE HAD DEBITED THE ENTIRE AMOUNT OF ELECTRICITY TO ITS PROFIT & LOSS ACCOUNT. THE SAID AMOUNT WAS DEDUCTIBLE U/S 37(1 ). THE ASSESSEE HAS NOT TREATED THE SAID AMOUNT TO BE A CONTINGENT LIABILITY. FOR THIS, OUR ATTENTION WAS DRAWN TOWARDS THE PUBLISHED ACCOUNTS FOR THE YEAR ENDED 31.3.2009 4 ITA NO. 521/CTK/2013 (ASST. YEAR : 2009 - 10) (INTERNAL PG. 37, 43 & 46). THE AO APPLIED THE PROVISIONS OF SEC. 43B TO THE DIFF ERENTIAL AMOUNT AMOUNTING TO RS.6,29,11,949/ - AND DISALLOWED THE SAME. THE SAID AMOUNT WAS NOT DISALLOWABLE U/S 43B. R EFERRING TO THE PROVISIONS OF SEC. 43B IT WAS CONTENDED THAT SO FAR AS THE ASSESSEE IS CONCERNED, THE MONEY HAS OUT FLOWN FROM THE ASSES SEE AND THE ASSESSEE WAS NOT HAVING ANY LIEN IN RESPECT OF THE SAID AMOUNT WHICH WAS DEPOSITED IN THE NO - LIEN ACCOUNT WITH STATE BANK OF INDIA. 2.3 THE LD. DR ON THE OTHER HAND RELIED ON THE ORDER OF THE CIT(A). 2.4 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONGWITH THE ORDER OF THE TAX AUTHORITIES BELOW. THE UNDISPUTED FACTS IN THIS CASE ARE THAT THE ASSESSEE COMPANY CALCULATED AND PAID ELECTRICITY DUTY ON A PR OVISIONAL BASIS @ 12 PAISE/UNIT. THE ODISHA GOVERNMENT HAS BEE N DEMANDING SUCH DUTY @ 20 PAISE/UNIT. THE COMPANY RECEIVED A NOTICE DT. 10.12.2004 DEMANDING A SUM OF RS. 43.59 CRORES UPTO 31.10.2004 TOWARDS THE ELECTRICITY DUTY WORKED OUT @ 20 PAISE/UNIT INCLUSIVE OF INTEREST @ 18% P.A. AFTER APPROPRIATING PROVISIONAL PAYMENT MADE BY THE COMPANY TOWARDS INTEREST AND THEREAFTER TOWARDS THE PRINCIPAL. THE COMPANY CHALLENGED THE SAID DEMAND AND REFUTED THE LIABILITY TO PAY INTEREST AND FILED A PETITION BEFORE THE HON'BLE HIGH COURT OF ODISHA. THE HON'BLE HIGH COURT VIDE INTERIM ORDER DT. 21.4.2005 DIRECTED THE ASSESSEE TO PAY THE ELECTRICITY DUTY @ 6 PAISE/UNIT TO THE GOVERNMENT OF ODISHA AND TO KEEP THE DIFFERENTIAL DUTY OF 14 PAISE/UNIT IN A SEPARATE NO - LIEN ACCOUNT TILL THE CASE IS DECIDED. THE COMPANY HAS PAID THE ELECTRICITY DUTY @ 6 PAISE/UNIT EFFECTIVE FROM 1.4.2005 AND MAINTAINED BALANCE 14 PAISE/UNIT IN NO - LIEN ACCOUNT WITH THE STATE BANK OF INDIA. THE ASSESSEE HAS THUS DEBITED A SUM OF RS. 11,42,61,000/ - TO ITS PROFIT & LOSS ACCOUNT ON ACCOUNT OF ELECTRICI TY DUTY. THE SUM OF RS. 5,13,49,200/ - REPRESENTS THE ACTUAL AMOUNT PAID FOR THE IMPUGNED ASSESSMENT YEAR . ANOTHER SUM OF 5 ITA NO. 521/CTK/2013 (ASST. YEAR : 2009 - 10) RS.6,29,11,949/ - WAS DEPOSITED BY THE ASSESSEE IN THE DESIGNATED NO - LIEN BANK ACCOUNT IN THE STATE BANK OF INDIA AS PER THE INTERIM ORDER OF THE HON'BLE HIGH COURT. NOW, THE QUESTION ARISING BEFORE US IS WHETHER THE ASSESSEE WILL BE ENTITLED FOR DEDUCTION OF RS.6,29,11,949/ - WHICH HAS BEEN DEPOSITED IN THE DESIGNATED NO - LIEN BANK ACCOUNT. SINCE THE DEMAND AT THE DIFFERENTIAL RATE PER UNIT RELATES TO THE IMPUGNED ASSESSMENT YEAR AND THE ELECTRICITY RELATING TO THAT HAS BEEN CONSUMED DURING THE YEAR, IN VIEW OF THE MERCANTILE SYSTEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE, IN OUR OPINION, THIS EXPENSE HAS A C C R U E D DURING THE YEAR. TH E LIABILITY SINCE A CC R U ED DURING THE YEAR AND THE EXPENSES FOR THE ELECTRICITY DUTY HAS BEEN INCURRED WHOLLY AND FULLY FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE, THESE EXPENSES ARE ALLOWABLE U/S 37(1) OF THE INCOME TAX ACT. THIS IS DUE TO THE FACT THAT WHENEVER A CONSUMER NEEDS POWER IT HAS TO APPROACH THE STATE ELECTRICITY BOARD TO SUPPLY THE POWER AND IT ENTERS INTO A PROFORMA CONTRACT BUT AS RESPECT TO THE RATE/S AT WHICH THE POWER IS TO BE SUPPLIED, THE RELATIONSHIP BETWEEN THE STATE GOVERNMENT AND THE CONSUMER IS NOT CONTRACTUAL, FOR THE FIXATION OF THE TARIFF IS GOVERNED BY THE ELECTRICITY (SUPPLY) ACT, 1948. THUS, IN RELATION TO THE RATE(S) AT WH ICH THE POWER SUPPLY WILL BE AVAILABLE TO IT, THE POSITION OF THE CONSUMER IS NOT THAT OF A PARTY TO A CONTRACT BUT ONE OF STATUS. THIS IS SO BECAUSE SO FAR AS POWER TARIFF IS CONCERNED, IT IS IMPOSED ON THE CONSUMER BY LAW WITHOUT THE CONSENT OF THE CONS UMER. THUS, THE LIABILITY TO PAY POWER TARIFF, IN OUR OPINION, IS NOT CONTRACTUAL IN NATURE BUT IS STATUS BASED. THE LIABILITY TO THIS ACCRUES, THEREFORE, IN THE YEAR IN WHICH THE POWER HAS BEEN CONSUMED AND THIS LIABILITY IN VIEW OF THE ELECTRICITY (SUP PLY) ACT, 1948 CAN BE NAMED AS STATUTORY LIABILITY. THE LAW IS WELL - SETTLED SO FAR IT RELATES TO STATUTORY LIABILITY. ACCRUAL OF THE STATUTORY LIABILITY ARISES IN THE YEAR TAXABLE EVENT O C C U R R E D EVEN THOUGH THE LIABILITY MIGHT HAVE BEEN DISPUTED BY THE AS SESSEE. THE HON'BLE SUPREME COURT IN THE CASE OF KEDARNATH JUTE MANUFACTURING CO. LTD. VS. CIT, 82 ITR 363 (SC) HAS LAID DOWN THE PROPOSITION OF LAW THAT ACCRUAL OR ARISING OF LIABILITY TO PAY STATUTORY LIABILITY IS 6 ITA NO. 521/CTK/2013 (ASST. YEAR : 2009 - 10) ACCRUED WHEN THE TAXABLE EVENT TAKES PL ACE AND THAT THE ASSESSEE WHO FOLLOWS MERCANTILE SYSTEM OF ACCOUNTING IS ENTITLED TO DEDUCT FROM THE PROFIT AND GAINS OF THE BUSINESS SUCH LIABILITY AS ACCRUED DURING THE PERIOD FOR WHICH THE PROFIT AND GAINS WERE BEING COMPUTED. IN THIS REGARD, THE EXIST ENCE OR ABSENCE OF ENTRIES IN THE BOOKS OF ACCOUNTS IS NOT DECISIVE OR CONCLUSIVE OF THE MATTER BUT WE NOTED THAT THERE ARE EMBARGOES PUT BY SEC. 43B. SEC. 43B STATES AS UNDER : 43B. NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISION OF THIS ACT, A DEDUCTION OTHERWISE ALLOWABLE UNDER THIS ACT IN RESPECT OF [( A ) ANY SUM PAYABLE BY THE ASSESSEE BY WAY OF TAX, DUTY, CESS OR FEE, BY WHATEVER NAME CALLED, UNDER ANY LAW FOR THE TIME BEING IN FORCE, OR] ( B ) ANY SUM PAYABLE BY THE ASSESSEE AS AN EMPLOYER BY WAY OF CONTRIBUTION TO ANY PROVIDENT FUND OR SUPERANNUATION FUND OR GRATUITY FUND OR ANY OTHER FUND FOR THE WELFARE OF EMPLOYEES, [OR] [( C ) ANY SUM REFERRED TO IN CLAUSE ( II ) OF SUB - SECTION (1) OF SECTION 36,] [OR] [( D ) ANY SUM PAYABLE BY THE ASSESSEE AS INTEREST ON ANY LOAN OR BORROWING FROM ANY PUBLIC FINANCIAL INSTITUTION [OR A STATE FINANCIAL CORPORATION OR A STATE INDUSTRIAL INVESTMENT CORPORATION], IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE AGREEMENT GOVERNING SUCH LOAN OR BORROWING [, OR] [( E ) ANY SUM PAYABLE BY THE ASSESSEE AS INTEREST ON ANY [LOAN OR ADVANCES] FROM A SCHEDULED BA NK IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE AGREEMENT GOVERNING SUCH LOAN [OR ADVANCES],] [OR] [( F ) ANY SUM PAYABLE BY THE ASSESSEE AS AN EMPLOYER IN LIEU OF ANY LEAVE AT THE CREDIT OF HIS EMPLOYEE,] SHALL BE ALLOWED (IRRESPECTIVE OF THE PREVIOU S YEAR IN WHICH THE LIABILITY TO PAY SUCH SUM WAS INCURRED BY THE ASSESSEE ACCORDING TO THE METHOD OF ACCOUNTING REGULARLY EMPLOYED BY HIM) ONLY IN COMPUTING THE INCOME REFERRED TO IN SECTION 28 OF THAT PREVIOUS YEAR IN WHICH SUCH SUM IS ACTUALLY PAID BY H IM : [ PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY IN RELATION TO ANY SUM WHICH IS ACTUALLY PAID BY THE ASSESSEE ON OR BEFORE THE DUE DATE APPLICABLE IN HIS CASE FOR FURNISHING THE RETURN OF INCOME UNDER SUB - SECTION (1) OF SECTION 139 IN RES PECT OF THE PREVIOUS YEAR IN WHICH THE LIABILITY TO PAY SUCH SUM WAS INCURRED AS AFORESAID AND THE EVIDENCE OF SUCH PAYMENT IS FURNISHED BY THE ASSESSEE ALONG WITH SUCH RETURN . FROM THE PREAMBLE OF THIS SECTION IT IS APPARENT THAT THIS SECTION IS APPLICA BLE ONLY IF A DEDUCTION IS OTHERWISE ALLOWABLE TO THE ASSESSEE IN ANY OTHER PROVISIONS OF THE INCOME TAX ACT. WE HAVE ALREADY HELD THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION IN RESPECT OF ELECTRICITY DUTY AS PER THE DEMAND RAISED BY 7 ITA NO. 521/CTK/2013 (ASST. YEAR : 2009 - 10) THE STATE GOVERNMENT FOR THE IMPUGNED ASSESSMENT YEAR D URING THE IMPUGNED ASSESSMENT YEAR IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF KEDARNATH JUTE MANUFACTURING CO. LTD. VS. CIT, 82 ITR 363 (SC) ( SUPRA ). THEREFORE, IN THE CASE OF THE ASSESSEE WE HAVE TO SEE WHETHER THE ASSESSEE IS HIT BY THE RESTRICTIONS PUT BY SEC. 43B. AS IS APPARENT FROM THE SAID PROVISION , THE ASSESSEE WILL BE ALLOWED DEDUCTION IN RESPECT OF ELECTRICITY DUTY IF THE SAID DUTY HAS ACTUALLY BEEN PAID BY THE ASSESSEE DURING T HE IMPUGNED ASSESSMENT YEAR OR BEFORE FILING OF THE INCOME TAX RETURN WITHIN THE DUE DATE. IT IS NOT THE CLAIM OF THE ASSESSEE THAT THE ELECTRICITY CHARGES ARE NOT DUTY OR CESS AND THEREFORE PROVISIONS OF SEC. 43B ARE NOT APPLICABLE. THE CONTENTION OF TH E ASSESSEE IS THAT SINCE THE ASSESSEE HAS DEPOSITED THE AMOUNT IN THE NO - LIEN ACCOUNT AS PER THE DIRECTIONS OF THE HON'BLE HIGH COURT, THE DEPOSITING OF THE AMOUNT IN NO - LIEN ACCOUNT TANTAMOUNT TO ACTUAL PAYMENT MADE BY THE ASSESSEE. WE DO NOT AGREE WI TH THE SUBMISSION OF THE ASSESSEE. THE WORD USED U/S 43B ARE SAME AS ACTUALLY PAID. BY D EPOSITING THE AMOUNT IN A DESIGNATED ACCOUNT , IT CANNOT BE SAID THAT AMOUNT HAS ACTUALLY BEEN PAID BY THE ASSESSEE TO THE STATE GOVERNMENT. WHENEVER PAYMENT IS MADE IN RESPECT OF A LIABILITY, THE RECEIVER OF THE AMOUNT MUST BE THE PERSON WHO HAS RECEIVED THE AMOUNT. THE PLAIN MEANING OF THE EXPRESSION ACTUALLY PAID MEANS THAT THE SAME SHOULD HAVE ACTUALLY BEEN PAID TO THE COFFER OF THE STATE GOVERNMENT. DEPOSITIN G THE AMOUNT WITH THE THIRD PARTY, IN OUR OPINION, WILL NOT TANTAMOUNT TO ACTUAL PAYMENT MADE TO THE STATE GOVERNMENT. THE ASSESSEE MAY NOT HAVE NO LIEN ON THE ACCOUNT IN WHICH THE AMOUNT HAS BEEN DEPOSITED BUT THAT DOES NOT MEAN THAT THE AMOUNT HAS ACTUA LLY BEEN PAID TO THE STATE GOVERNMENT. THE AMOUNT IS KEPT INTO NO - LIEN ACCOUNT JUST TO ENSURE THE PAYMENT OF THE LIABILITY IN THE EVENT OF STATE GOVERNMENT SUCCEEDING IN THE PENDING LITIGATION. THIS CANNOT BE REGARDED TO BE THE SUM ACTUALLY PAID TO THE STATE GOVERNMENT FOR THE ELECTRICITY TARIFF. THE ASSESSEE HAS DISPUTED THE LIABILITY AND WENT BEFORE THE HON'BLE HIGH COURT. ON THE DIRECTION OF THE HON'BLE HIGH COURT THE AMOUNT HAS BEEN DEPOSIT E D BY THE 8 ITA NO. 521/CTK/2013 (ASST. YEAR : 2009 - 10) ASSESSEE IN THE DESIGNATED NO - LIEN ACCOUNT WITH THE BANKER. THIS, BY NO STRETCH OF IMAGINATION CAN BE REGARDED TO BE THE DISCHARGE OF THE LIABILITY BY THE ASSESSEE. ACTUAL PAYMENT OF THE AMOUNT M E A N S THAT THE LIABILITY IS ACTUALLY DISCHARGED BY THE ASSESSEE. IN VIEW OF OUR AFORESAID DISCUSSION , WE CONFIRM THE ORDER OF CIT(A) ON THIS ISSUE AND DISMISS GROUND NO. 1 TAKEN BY THE ASSESSEE. 3. GROUND NO. 2 DEALS WITH THE CLAIM OF DEDUCTION IN RESPECT OF FOREIGN TRAVELING EXPENDITURE OF THE DIRECTORS. THE BRIEF FACTS RELATING TO THIS GROUND ARE THAT TH E AO NOTED THAT THE ASSESSEE HAS CLAIMED FOREIGN TRAVELLING EXPENSES OF THE DIRECTORS TO THE TUNE OF RS. 1,55,80,882/ - AND DIRECTOR - WISE BREAK UP WAS FILED BY THE ASSESSEE. ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF THE EXPENDITURE CLAIMED UNDER THE HEA D FOREIGN TOUR TRAVEL ALONGWITH TOUR PROGRAMME AND SUPPORTING EVIDENCE. THE AO NOTED THAT THE ASSESSEE HAS FILED SKETCHY DETAILS OF THE EXPENDITURE FOR 4 CHAIRMAN/DIRECTORS AS UNDER : 1. DR. BANSIDHAR PANDA, EXECUTIVE CHAIRMAN - RS. 28,37,884/ - 2. SRI SUBHRAKANTA PANDA, MANAGING DIRECTOR - RS. 96,38,029/ - 3. SRI JAYANT KUMAR MISHRA, DIRECTOR (CORPORATE) - RS. 8,81,728/ - 4. SRI BAIJAYANT PANDA, VICE - CHAIRMAN - RS. 22,23,241/ - TOTAL RS.1,55,80,882/ - THE AO NOTED THAT T HE ABOVE DIRECTORS HAVE VISITED VARIOUS PLACES SUCH AS LONDON, SAN FRANCISCO, JAPAN, GERMANY, DUBAI, SEOUL, TOKYO, SOUTH KOREA, BANGKOK, JOHANSBURG, SOUTH AFRICA ETC. MAINLY TO EXPLORE THE POTENTIAL MARKET OF FERRO ALLOYS CONSUMERS IN RESPECTIVE COUNTRIES BUT THE ASSESSEE NEITHER FILED THE TOUR ITINERARY OF THE DIRECTORS NOR THE ITEM - WISE EXPENSES SUCH AS EXPENSES ON TRAVEL, STAY, ENTERTAINMENT. THEREFORE, THE AO DISALLOWED 20% OF SUCH EXPENDITURE. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). BEFORE CI T(A), THE ASSESSEE DID NOT PRESS THIS GROUND OF APPEAL. THEREFORE, THE CIT(A) SUSTAINED THE ADDITION. 9 ITA NO. 521/CTK/2013 (ASST. YEAR : 2009 - 10) 3.1 THE LD. AR BEFORE US DREW OUR ATTENTION TO PG. 20 - 21 OF THE PAPER BOOK AND CONTENDED THAT THE ASSESSEE HAS SUBMITTED THE DETAILS OF THE EXPENSES INC URRED ON FOREIGN TRAVELLING BY EACH OF THE DIRECTORS. EXPENDITURE HAS BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. 3.2 THE LD. DR ON THE OTHER HAND RELIED ON THE ORDER OF CIT(A). HE CONTENDED THAT THE ASSESSEE HAS NOT PRESSED THIS GROUND BEFORE THE CIT(A). 3.3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. IN OUR OPINION, THE ONUS IS ON THE ASSESSEE TO PROVE THE GENUINENESS OF THE EXPENDITURE. FROM THE DETAILS, A COPY OF WHICH WERE FILED B EFORE US, WE NOTED THAT THE ASSESSEE HAS SUBMITTED MERELY THE NAMES OF THE DIRECTORS, PLACES THEY VISITED AND THE PURPOSE OF THE VISIT, EXPENDITURE INCURRED AT THE PLACE. THESE DETAILS, IN OUR OPINION, DO NOT PROVE THE GENUINENESS OF THE EXPENDITURE. IF THE ASSESSEE CLAIMS ANY DEDUCTION, IN OUR OPINION, THE ONUS IS ON THE ASSESSEE TO PROVE THAT IT HAS INCURRED THE EXPENDITURE AND THE EXPENDITURE INCURRED BY IT IS GENUINE. WE NOTED THAT THE AO HAS DISALLOWED 20% OF THE EXPENDITURE AS THE ASSESSEE DID NOT FILE BEFORE THE AO THE TOUR ITINERARY OF THE DIRECTORS, DETAILS OF ITEM - WISE EXPENSES INCURRED BY EACH OF THE DIRECTORS ON TRAVEL, STAY AND ENTERTAINMENT ETC. NOT ONLY THIS, EVEN THOUGH THE ASSESSEE HAS GONE BEFORE THE CIT(A) IN RESPECT OF THE SAID GROUND OF APPEAL, BUT BEFORE THE CIT(A) THE ASSESSEE DID NOT PRESS THE SAID GROUND OF APPEAL. BEFORE US, EVEN THOUGH THE ASSESSEE HAS TAKEN THE GROUND BUT DID NOT PLACE ANY COGENT MATERIAL OR EVIDENCE FOR NON - FILING OF WHICH THE AO HAD MADE THE DISALLOWANCE. T HE CONTENTION OF THE ASSESSEE CANNOT BE ACCEPTED THAT THE AO HAS NOT ASKED FOR THE EVIDENCES. IF THE ASSESSEE HAD NECESSARY EVIDENCES, HE COULD HAVE PRODUCED THE SAME BEFORE THE CIT(A) OR BEFORE US. UNDER THESE CIRCUMSTANCES, WE DISMISS THE GROUND 10 ITA NO. 521/CTK/2013 (ASST. YEAR : 2009 - 10) TAKEN BY THE ASSESSEE AND CONFIRM THE ORDER OF AO. THUS, GROUND NO. 2 STANDS DISMISSED. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. 5. ORDER PRONOUNCED IN PURSUANCE OF RULE 34(4) OF ITAT RULES, 1963 BY PUTTING ON NOTICE BOARD OF THE BENCH AT CUTTACK ON 1 3 /06/ 201 4 . S D / - (D.T.GARASIA) JUDICIAL MEMBER S D / - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI DATED : 1 3 / 06 /201 4 *SSL* COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER