ACIT, New Delhi V. M/s Kumar Printers Pvt. Ltd., New Delhi

ITA 5379/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82114 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 14-10-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 03-10-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: RATNGSH KUMAR GUPTA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI SHRI T.S. KAPOOR, ACCOUNTANT MEMBER AND BEFORE SHRI A.T. VARKEY, JUDICIAL MEMBER ITA NO . 537 9 /DEL/ 2013 ASSESSMENT YEAR : 2009 - 10 ACIT, VS. KUMAR PRINTERS PVT. LTD., CIRCLE 5(1), D - 92/4, OKHLA INDUSTRIAL AREA, NEW DELHI. PHASE - 1, NEW DELHI. AAACK1232D (APPELLANT) (RESPONDENT) APPELLANT BY: SH. VIVEK NANGIA, SR. DR RESPONDENT BY: SH. RATNGSH KUMAR GUPTA, CA ORDER PER A.T. VARKEY, J.M. THIS APPEAL ARISES FROM THE ORDER OF THE CIT(A) - VIII DATED 30 TH JULY, 2013 FOR A.Y. 2009 - 10. 2. GROUND ONE PERTAINS TO ADDITION ON ACCOUNT OF FOREIGN TRAVEL EXPENSES MADE BY THE AO BY HOLDING THAT SUCH EXPENSES ARE PERSONAL IN NATURE. 3. BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PRINTING AND MANUFACTURING OF PACKING MATERIALS. DURING THE YEAR UNDER CONSIDERATIONS A SUM OF RS. 8,17,932/ - WAS INCURRED ON FOREIGN TRAVELLING, OUT OF WHICH RS. 6,18,628/ - HAS BEEN HELD BY THE AO TO HAVE BEEN INCURR ED ON PLEASURE TRIPS ORGANIZED THROUGH ORBIT TOURS ON VISIT TO GERMANY. 4. BEFORE THE CIT(A), IT WAS SUBMITTED THAT THE DIRECTOR OF THE ASSESSEE COMPANY HAD MADE THE FOREIGN VISIT TO PARTICIPATE IN THE EXHIBITION OF PACKAGING AND MACHINERY MANUFACTURES AT DUSSELDORF, GERMANY. THE CIT(A), ACCORDINGLY DELETED THE ADDITION BY HOLDING AS UNDER: ITA NO. 537 9 /D/ 2013 KUMAR PRINTERS PVT. LTD. 2 DISALLOWANCE OF FOREIGN EXCHANGES OF RS. 6,18,628/ - THE APPELLANT COMPANIES DIRECTORS SH. SANDEEP BHARGAVA AND SH. M.K. BHARGAVA HAS MADE VISIT TO GERMANY TO SEE TH E EXHIBITION OF PACKAGING AND MACHINERY MANUFACTURER IN WHICH INTERNATIONAL COMPANIES HAVING EXPERTISE IN PACKING AND PRINTING PARTICIPATED. THE AR OF THE APPELLANT PRODUCED EVIDENCES OF DAILY VISIT TO EXHIBITION FROM 28 TH MAY, 2008 TO 5 TH JUNE, 2008 AND ALSO GIVE TOUR ITINERARY OF DRUPA FOR VISITING THE EXHIBITION WHICH ARE VERIFIED AND PLACED IN THE PAPER BOOK. SINCE THE EVIDENCES OF OFFICIAL VISITS OF DIRECTORS PLACED BY THE AR THE FOREIGN TRAVEL EXPENDITURE OF RS. 6,18,628/ - IS ALLOWED. 5. WE HAVE C ONSIDERED THE RIVAL SUBMISSIONS. THE LD. DR WAS UNABLE TO PERSUADE US TO ARRIVE AT A DIFFERENT CONCLUSION THAN THAT OF THE LD. CIT(A). ONCE IT HAS BEEN FOUND THAT THE DIRECTORS HAVE PARTICIPATED IN AN EXHIBITION FOR THE PURPOSE OF BUSINESS, NO SURMISABLE ASSUMPTION COULD BE MADE A GROUND TO ASSUME THAT SUCH EXPENDITURE WAS PERSONAL EXPENDITURE. IT IS A WELL SETTLED LAW THAT A COGENT EXPLANATION SUPPORTED BY DOCUMENTARY EVIDENCE CANNOT BE SIMPLY DISCARDED BY SURMISES AND CONJECTURE WITHOUT DISPROVING THE S AME. WE, THEREFORE, SUSTAIN THE ORDER OF THE CIT(A). AS SUCH THIS GROUND IS REJECTED. 6. GROUND NO. 2 PERTAINS TO DISALLOWANCE OF RS. 5,20,727/ - ON ACCOUNT OF CAR MAINTENANCE EXPENSES ON THE GROUND THAT SUCH EXPENDITURE IS PERSONAL EXPENDITURE. 7. ON CONSIDERATION OF THE SUBMISSION AND FACTS ON RECORD WE FIND THAT IT HAS BEEN SUBMITTED BEFORE THE CIT(A) THAT ASSESSEE HAD PAID FRINGE BENEFIT TAX AT 20% ON CAR REPAIRING AND MAINTENANCE EXPENSES. IN SUCH CIRCUMSTANCES, THE LD. CIT(A) HELD THAT EXPENDITUR E THUS INCURRED IS NOT PERSONAL EXPENDITURE. HOWEVER, THOUGH HE DIRECTED THE VERIFICATION OF THE AFORESAID CLAIM OF PAYMENT OF FBT, HE HAS DELETED THE SAID ADDITION, WHICH WE FEEL IS ERRONEOUS AND SO WE SET - ASIDE THE ORDER OF THE CIT(A) AND REMAND THIS IS SUE BACK TO THE FILE OF AO WITH A DIRECTION THAT IF THE CLAIM OF THE ASSESSEE THAT FBT HAS BEEN PAID AT THE RATE OF 20% OF THE EXPENDITURE INCURRED, THEN THE DISALLOWANCE BE DELETED. 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 537 9 /D/ 2013 KUMAR PRINTERS PVT. LTD. 3 ORDER PRONOUNCED IN THE OPEN COURT ON 14 . 11.2014. ( T.S. KAPOOR ) (A.T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 14.11.2014 S *KAVITA, P.S/AK KEOT COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI TRUE COPY BY ORDER ASSISTANT REGISTRAR