BLACKSTONE FRANKS PREMNARAYEN CORPORATE FINANCE P. LTD, MUMBAI V. ITO 9(1), MUMBAI

ITA 5268/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55172 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 25-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P C MAURYA
• Assessee Lawyers: RAJENDRA BAGADE; PREMJI DEDHIA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B,MUMBAI BEFORE SHRI R.S. SYAL (AM) & SHRI VIJAY PAL RAO (J M) I.T.A.NO.5268/MUM/2010 (A.Y. 2005-06) BLACKSTONE FRANKS PREMNARAYEN CORPORATE FINANCE P.LTD., A-401, BUSINESS SQUARE, SOLITAIRE CORPORATE PARK, CHAKALA, ANDHERI (E), MUMBAI-400093. PAN: AAACB2474N VS. INCOME-TAX OFFICER-9(1), MUMBAI. APPELLANT RESPONDENT APPELLANT BY SHRI PREMJI DEDHIA & SHRI RAJENDRA BAGADE. RESPONDENT BY SHRI P .C. MAURYA. DATE OF HEARING 30-08-2011 DATE OF PRONOUNCEMENT 07-09-2011 O R D E R PER R.S. SYAL, AM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 17-03-2010 IN RELATION TO THE ASSTT. YEAR 2005-06. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF FOREIGN TRAVELING EXPENSES TO THE T UNE OF RS.5,70,338/-. 3. BRIEFLY STATED, THE FACTS APROPOS THIS ISSUE ARE THAT THE ASSESSEE CLAIMED TRAVELING AND CONVEYANCE EXPENSES AMOUNTING TO RS.7 ,38,790/-. THIS AMOUNT INCLUDED A SUM OF RS.5,70,338/- REPRESENTING FOREIG N TRAVEL EXPENSES OF MR. IVOR MISQUITH AND MR. SUIBHASH THAKRAR TO LONDON. ON BE ING CALLED UPON TO JUSTIFY ITA NO.5268/MUM/2010 BLACKSTONE FRANKS PREMNARAYEN CORPORATE FINANCE P.LTD . 2 THE DEDUCTION IT WAS STATED ON BEHALF OF THE ASSESS EE THAT IT HAD A CLIENT BASE ABROAD AND THE DIRECTORS/EMPLOYEES OF THE COMPANY N EED TO TRAVEL ABROAD FOR EXPANSION OF BUSINESS. THE AO NOTED THAT ONE OF THE GROUP COMPANIES, NAMELY, BLACKSTONE FRANKS LLP WAS SITUATED AT LONDON. IN THE OPINION OF THE AO THERE WAS NO NECESSITY OF UNDERTAKING SUCH TRAVELING. IN THE ABSENCE OF SOME MATERIAL TO SHOW AS TO WHY MEASURES WERE NOT TAKEN TOWARDS PROJECT EXPANSION AS CLAIMED BY THE ASSESSEE, THE AO DISALLOWED THE SAID SUM OF RS.5,70,338/-. THE ASSESSMENT ORDER WAS ECHOED ON THIS ISSUE. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, IT IS NOTICED THAT THE ASSESSEE IS ENGAG ED IN THE BUSINESS OF MANAGEMENT CONSULTANCY SERVICES. IN CARRYING ON SUC H BUSINESS, THE ASSESSEE WAS REQUIRED TO PROVIDE SUCH CONSULTANCY SERVICES I N LONDON ON CONTINUOUS BASIS. IT HAS BEEN STATED BEFORE THE AO THAT THE FOREIGN T RAVEL WAS UNDERTAKEN IN THE INTEREST OF BUSINESS TO SATISFY ITS CUSTOMERS ABROA D. THAT BEING THE POSITION, ANY EXPENDITURE INCURRED IN FOREIGN TRAVELING TO LONDON HAS TO BE ALLOWED AS DEDUCTION. THE MERE FACT THAT ONE OF THE GROUP CONC ERNS HAD OFFICE IN LONDON DOES NOT CHANGE THE COMPLEXION OF THE EXPENDITURE I NCURRED BY THE ASSESSEE FOR ITS BUSINESS PURPOSES. WE, THEREFORE, OVERTURN THE IMPUGNED ORDER ON THIS ISSUE AND ORDER FOR THE DELETION OF ADDITION. 5. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED ON THE 07TH DAY OF SEPTEMBER, 2011. SD/- SD/- (VIJAY PAL RAO) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 07TH SEPTEMBER , 2011. ITA NO.5268/MUM/2010 BLACKSTONE FRANKS PREMNARAYEN CORPORATE FINANCE P.LTD . 3 NG: COPY TO : 1. ASSESSEE. 2. DEPARTMENT. 3 CIT(A)-19,MUMBAI. 4 CIT-9,MUMBAI. 5.DR,B BENCH,MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST.REGISTRAR, ITAT, MUMBAI. ITA NO.5268/MUM/2010 BLACKSTONE FRANKS PREMNARAYEN CORPORATE FINANCE P.LTD . 4 DETAILS DATE INITIALS DESIGN ATION 1. DRAFT DICTATED ON 30-08- 2011 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 30-08- 2011 SR.PS/ 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON 07-09-11 SR.PS/ 7. FILE SENT TO THE BENCH CLERK 07-09-11 SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER *