Mother Mira Industries Ltd., CHENNAI V. ACIT, CHENNAI

ITA 561/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8407 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 10-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVASJCIT
• Keywords: Business expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , .. ' #$,& '( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.561/MDS/2016 * +* / ASSESSMENT YEAR : 2007-08 M/S. MOTHER MIRA INDUSTRIES LTD., NO.1, COOKS ROAD, PERAMBUR, CHENNAI 600 012. PAN : AACCM 2392L V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE -4(1), CHENNAI- 600 002. (-./ APPELLANT) (/0-./ RESPONDENT) -. 1 2 / APPELLANT BY : SHRI SAROJ KUMAR PARIDA, ADVOCATE /0-.12 / RESPONDENT BY : SHRI SHIVA SRINIVAS, JCIT ' 13& / DATE OF HEARING : 28.07.2016 45+ 13& / DATE OF PRONOUNCEMENT : 23.09.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF CIT(A) -8, CHENNAI DATED 31.12.2015 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2 I.T.A. NO.561/MDS/2016 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS DISA LLOWANCE OF FOREIGN TRAVEL EXPENSES OF THE DIRECTOR OF THE ASSESSEE COM PANY. SHRI SAROJ KUMAR PARIDA, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE CLAIMED A SUM OF RS.6,04,629/- TOWARDS FOR EIGN TRAVEL EXPENDITURE ON THE DIRECTOR. THE ASSESSING OFFICER, HOWEVER, DISALLOWED THE CLAIM OF THE ASSESSEE. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, THE EXPENSES WERE INCURRED BY THE ASSESSE E-COMPANY WHEN THE DIRECTOR UNDERTOOK A FOREIGN TRIP FOR ACQUIRING A MILL IN EUROPEAN COUNTRIES. THEREFORE, ACCORDING TO THE LEARNED COUN SEL FOR THE ASSESSEE, THE EXPENDITURE INCURRED BY THE ASSESSEE IS AN ALLO WABLE BUSINESS EXPENDITURE. 3. ON THE CONTRARY, SHRI SHIVA SRINIVAS, THE LEARNE D REPRESENTATIVE FOR THE DEPARTMENT SUBMITTED THAT THE ASSESSEE HAS NOT PRODUCED ANY MATERIAL BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(A) REGARDING THE FOREIGN TRAVEL EXPENDITURE CLAIMED BY THE ASSESSEE. THE ASSESSEE OTHER THAN PRODUCING THE DETAILS OF THE EXPENDITURE INCUR RED IN FOREIGN TRAVEL BY THE DIRECTOR TO EUROPE, TURKEY AND NIGERIA, NO OTHE R EVIDENCE WAS FILED BEFORE THE ASSESSING OFFICER. THE DETAILS OF THE OB JECT OF THE FOREIGN TRIP WAS NOT FURNISHED BEFORE THE ASSESSING OFFICER OR B EFORE THE CIT(A) . REFERRING TO THE ORDER OF CIT(A), THE LEARNED DEPAR TMENT REPRESENTATIVE SUBMITTED THAT THE ASSESSEE FAIRLY CONSIDERED BEFOR E THE CIT(A) THAT NO EVIDENCE WAS AVAILABLE TO SUBSTANTIATE THE TRIP UND ER TAKEN BY THE 3 I.T.A. NO.561/MDS/2016 DIRECTOR OF THE COMPANY. IN THE ABSENCE OF ANY MATE RIAL, ACCORDING TO THE LEARNED REPRESENTATIVE, THE CIT(A) HAS RIGHTLY CONF IRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSES SING OFFICER DISALLOWED A SUM OF RS.6,04,629/- BEING THE SO CALL ED FOREIGN TRAVEL EXPENSES OF DIRECTOR OF THE ASSESSEE COMPANY. THE A SSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THESE EXPENDITURE S WERE INCURRED ON THE FOREIGN TRAVEL UNDERTOOK BY SHRI ARAVIND NANDAGOPAL AND SHRI R. SANKARANARAYAN IN ORDER TO ACQUIRE A MILL IN EUROPE AN COUNTRIES AND SET A BUSINESS IN INDIA. THOUGH THE ASSESSEE HAS FILED THE DETAILS OF THE TRAVEL UNDERTOOK BY THE DIRECTORS, THE DETAILS OF T HE MACHINERY OR MILL SAID TO BE ACQUIRED BY THE ASSESSEE WAS NOT FURNISHED BE FORE THE ASSESSING OFFICER. WHEN THE ASSESSEE CLAIMS THAT THE DIRECTOR S OF THE COMPANY UNDERTOOK FOREIGN TRAVEL IN ORDER TO ACQUIRE A MILL IN EUROPE, IT IS FOR THE ASSESSEE TO FURNISH THE DETAILS OF SUCH MILLS WHICH WERE INTENDED TO BE PURCHASED BY THE ASSESSEE. IN FACT, THE ASSESSEE AG REED BEFORE THE CIT(A) THAT NO SUCH DETAILS ARE AVAILABLE ON RECORD . IN THOSE CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED O PINION THAT THE CIT(A) HAS RIGHTLY CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER 4 I.T.A. NO.561/MDS/2016 OF THE LOWER AUTHORITIES. ACCORDINGLY, THE SAME IS CONFIRMED WITH REGARD TO FOREIGN TRAVEL EXPENSES. 5. THE ASSESSEE HAS TAKEN ONE MORE GROUND WITH REG ARD TO DISALLOWANCE OF RS.19,00,791/- BEING THE EXPENDITUR E INCURRED ON MAINTENANCE OF VEHICLES. SHRI SAROJ KUMAR PARIDA, T HE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE CLAIME D RS.19,48,55,508/- UNDER THE HEAD RUNNING AND OPERATION OF VEHICLES FUEL AND OTHERS. THE ASSESSEE HAS ALSO ACCEPTED A HIRE RECEIPT OF RS .19,00,79,192/-. SINCE THERE WAS A HUGE DIFFERENCE BETWEEN THE EXPEN DITURE INCURRED AND THE HIRE CHARGES, THE ASSESSING OFFICER DISALLOWED A SUM OF RS.19,00,791/- BEING 1% OF THE EXPENDITURE. ACCORDI NG TO THE LEARNED COUNSEL, DISALLOWANCE OF RS.19,00,791/- WAS NOT JUS TIFIED. 6. ON THE CONTRARY, SHRI SHIVA SRINIVAS, THE LEARN ED REPRESENTATIVE FOR THE DEPARTMENT SUBMITTED THAT THE ASSESSEE CLAI MED AN EXPENDITURE OF RS.19,48,55,508/-. HOWEVER, THE ASSESSEE COULD N OT PRODUCE ANY DETAILS WITH REGARD TO THE EXPENDITURE EITHER BEFOR E THE ASSESSING OFFICER OR BEFORE THE CIT(A). IN THE ABSENCE OF ANY MATERIA L TO SUBSTANTIATE THE CLAIM OF THE ASSESSEE, THE ASSESSING OFFICER HAS DI SALLOWED THE NOMINAL AMOUNT OF 1% OF THE CLAIM OF THE ASSESSEE. THEREFOR E, THE CIT(A) HAS ALSO CONFIRMED THE SAME. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDL Y, THE ASSESSEE 5 I.T.A. NO.561/MDS/2016 CLAIMED AN EXPENDITURE OF RS.19,48,55,508/-. IN THE ABSENCE OF ANY DETAILS AND MATERIAL TO SUBSTANTIATE THE CLAIM OF T HE ASSESSEE, THE ASSESSING OFFICER, AS RIGHTLY SUBMITTED BY THE DEPA RTMENT REPRESENTATIVE HAS DISALLOWED A NOMINAL AMOUNT OF 1%. OUT OF THE T OTAL CLAIM OF RS.19,48,55,508/-, THE ASSESSING OFFICER HAS DISALL OWED ONLY A SUM OF RS.19,00,791/- FOR WANT OF DETAILS AND OTHER SUPPOR TING MATERIAL. EVEN BEFORE THIS TRIBUNAL, THE ASSESSEE COULD NOT PRODUC E ANY MATERIAL FOR CLAIMING EXPENDITURE OF RS.19,48,55,508/-. THEREFOR E, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS RIGHTLY CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. THEREFO RE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITIES. ACCORDINGLY, THE SAME IS CONFIRMED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE STAND S DISMISSED. ORDER PRONOUNCED ON 23 RD SEPTEMBER, 2016 AT CHENNAI. SD/- SD/- ( . . ' #$) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) & / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 23 RD SEPTEMBER, 2016. SP. 6 I.T.A. NO.561/MDS/2016 1 /3#8 98+3 /COPY TO: 1. -. /APPELLANT 2. /0-. /RESPONDENT 3. ' :3 () /CIT(A) 4. ' :3 /CIT, 5. 8; /3 /DR 6. * < /GF.