M/s. Shreem Industries, Ahmedabad V. The ACIT., Circle-10, Ahmedabad

ITA 560/AHD/2007

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0511 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-09-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 06-02-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NEETA SHAH
• Assessee Lawyers: S N DIVETIA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE SHRI P.K.BANSAL, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO.560/AHD/2007 ASSESSMENT YEAR: 2003-04 DATE OF HEARING:11.9.09 DRAFTED:15.10.09 M/S. SHREEM INDUSTRIES, 3, 2 ND FL.., B, JADAV CHAMBERS, ASHRAM ROAD, AHMEDABAD-9 PAN NO. AAHFS2225C V/S . ACIT CIR-10, AHMEDABAD (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI S.N.DIVETIA, AR RESPONDENT BY:- SMT. NEETA SHAH, SR. DR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-XVI AHMEDABAD IN APPEAL NO. CI T(A)-XVI/AC.CIR.10 /04/06-07 DATED 28-11-2006. THE ASSESSMENT WAS FRAMED BY THE ACIT, CIRCLE-10, AHMEDABAD U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTE R REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 16-02-2006 FOR ASSESSMENT YEAR 2003-04. 2. THE TWO ISSUE IN THIS APPEAL OF THE ASSESSEE I.E . INTEREST EXPENSES AND MOTOR CAR EXPENSES AT 1/6 TH ARE AGAINST THE ORDER OF CIT(A) ARE NOT PRESSED AT THE TIME OF HEARING BY THE LD. COUNSEL FOR THE ASSESSEE. ACCOR DINGLY, THESE TWO ISSUES IN THE ASSESSEES APPEAL ARE DISMISSED AS NOT PRESSED. 3. NOW THE ONLY REMAINING ISSUE IN THIS APPEAL OF T HE ASSESSEE IS AGAINST THE ORDER OF CIT(A) IN CONFIRMING THE FOREIGN TRAVEL EX PENSES AMOUNTING TO RS.4,23,634/-. ITA NO.560/AHD/2007 A.Y. 2003-04 M/S. SHREEM INDUSTRIES V. ACIT CIR-10 ABD PAGE 2 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE ALSO PERUSED TH E CASE RECORDS INCLUDING THE ASSESSMENT ORDER, ORDER OF CIT(A) AS WELL AS ASSESS EES PAPER BOOK CONTAINING PAGES 1-34. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE THAT THE ASSESSEE IS A PARTNERSHIP-FIRM ENGAGED IN THE BUSINESS OF EXPORT OF DYES AND CHEMICALS. THE ASSESSEE HAS FILED IT RETURN OF INCOME FOR ASSESSME NT YEAR 2003-04 ON 28-11-2003 DECLARING TOTAL INCOME OF RS.21,79,280/- AFTER CLAI MING DEDUCTION U/S.80HHC OF RS.21,16,176/-. DURING THE COURSE OF ASSESSMENT PR OCEEDINGS, THE ASSESSING OFFICER EXAMINED THE CLAIM OF DEDUCTION OF VARIOUS EXPENSES AND THE CLAIM OF DEDUCTION U/S.80HHC OF THE ACT AND THE ASSESSMENT W AS COMPLETED ON 16-02-2006 U/S.143(3) AFTER MAKING VARIOUS DISALLOWANCE. THE ASSESSEE HAD FURNISHED DETAILED EXPLANATION ALONG WITH EVIDENCE IN RESPECT OF THE F OREIGN TRAVEL EXPENSES OF SHRI GOPAL SHAH, WHO IS SON OF THE PARTNER OF THE ASSESS EE-FIRM, WHO HAD ACCOMPANIED SHRI MUKESH SHAH, PARTNER. SHRI GOPAL SHAH WAS AN M BA GRADUATE (MARKETING) FROM VALLABH VIDHYANAGAR AND HAD FURTHER STUDIES AT USA BEFORE RETURNING TO INDIA IN 2002. HE JOINED THE ASSESSEE-FIRM AS A PARTNER IN 2004. BEING QUALIFIED AND IN ORDER TO GET HIM ACQUAINTED WITH THE FOREIGN PARTIE S, HE HAD ACCOMPANIED SHRI MUKESH SHAH, THE PARTNER OF THE ASSESSEE-FIRM. THE CIT(A) HAS ERRONEOUSLY HELD THAT THE ASSESSEE HAD FAILED TO BRING ANY MATERIAL ON RECORD TO SHOW THAT FOREIGN TOUR BY SHRI GOPAL SHAH WAS FOR THE BUSINESS PURPOSES. T HE CIT(A) CONFIRMED THE DISALLOWANCE VIDE PARA-9 OF HIS APPELLATE ORDER AS UNDER:- 9. I HAVE CAREFULLY CONSIDERED THE OBSERVATION OF THE AO IN THE ASSESSMENT ORDER AND ARGUMENTS OF THE COUNSEL FOR THE APPELLAN T. I DO NOT FIND ANY FORCE IN THE ARGUMENTS OF THE COUNSEL. THE AO HAS RIGHTLY DI SALLOWED FOREIGN TRAVELING EXPENSES IN RELATION TO THE TRAVELING OF SHRI GOPAL SHAH, SON OF THE PARTNER OF THE APPELLANT. THE APPELLANT HAS FAILED TOBRING ANY MATERIAL ON RECORD TO SHOW THAT THE FOREIGN TOURS UNDERTAKEN BY SHRI GOPAL SHA H WERE FOR BUSINESS PURPOSES OF THE APPELLANT. SHRI GOPAL SHAH ACCOMPAN IED HIS FATHER WHO IS A PARTNER OF THE APPELLANT FOR HIS EXPOSURE / DEVELOP MENT WHICH CANNOT BE SAID TO BE FOR BUSINESS PURPOSES OF THE APPELLANT. THE C ONTENTIONS OF THE COUNSEL ARE REJECTED AND THE DISALLOWANCE OF RS.4,23,634/- MADE BY THE AO FROM OUT OF TRAVELING EXPENSES IS UPHELD. THIS GROUND OF APP EAL IS REJECTED. AGGRIEVED, THE ASSESSEE CAME IN SECOND APPEAL BEFOR E US. 5. WE FIND THAT THE ASSESSEE HAS SUBMITTED THE DETA ILS OF CORRESPONDENCE MADE BY SHRI GOPAL SHAH, WHO HAS UNDERTAKEN FOREIGN TOUR WITH HIS FATHER, SHRI MUKESH ITA NO.560/AHD/2007 A.Y. 2003-04 M/S. SHREEM INDUSTRIES V. ACIT CIR-10 ABD PAGE 3 SHAH. THE ASSESSEE CONTENDED BEFORE BOTH THE AUTHOR ITIES BELOW THAT GOPAL SHAH ASSISTED HIS FATHER, SHRI MUKESH SHAH IN THE BUSINE SS AND ATTENDED THE BUSINESS AFFAIR DURING FOREIGN TOUR. IT WAS THE FURTHER CON TENTION OF THE ASSESSEE THAT GOPAL SHAH IS AN MBA IN MARKETING AND HAD BEEN TAKEN HIS PARTNER IN THE YEAR 2004. WE ALSO FIND FROM THE CORRESPONDENCE SUBMITTED ON ASSE SSEES PAPER BOOK AT PAGES 10 TO 28, THE ENTIRE CORRESPONDENCE IS ADDRESSED TO SH RI MUKESH SHAH OR BY MUKESH SHAH. HENCE, EVEN NOW BEFORE US THE ASSESSEE COULD NOT ADDUCE ANY EVIDENCE IN SUPPORT AND THE CONTENTION OF THE ASSESSEE THAT SHR I GOPAL SHAH WAS ASSOCIATED WITH EXPORT BUSINESS OF THE ASSESSEE WHILE ON FOREI GN TOUR AND IN THE ABSENCE OF THE SAME, WE DISMISS THIS ISSUE OF THE ASSESSEES APPEA L. 6. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 06/11/2009 SD/- SD/- (P.K.BANSAL) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, DATED :06/11/2009 *DKP COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-XVI, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD