Dalmia (Bros.) Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 5746/DEL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0746 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2003-2004
• Appeal Filed On: 14-10-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: M L DUJARI
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.5746/DEL/2015 ASSESSMENT YEAR: 2003-04 M/S DALMIA (BROS) PVT. LTD., 2 ND FLOOR, INDRAPRAKSH BUILDING, 21, BARAKHAMBA ROAD, NEW DELHI. PAN: AAACD3525G VS DCIT , CIRCLE7(1), NEW DELHI. APPELLANT RESPONDENT ASSESSEE BY SHRI M.L. DUJARI, CA REVENUE BY SHRI SURENDER PAL, SR. DR ORDER PER K. NARASIMHA CHARY, JM CHALLENGING THE ORDER DATED 20.08.2015 IN APPEAL NO215/2014-15, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-3, NEW DELHI (LD. CIT(A)), ASSESSEE PREFERRED THIS APPEAL. DATE OF HEARING 30.11.2018 DATE OF PRONOUNCEMENT 30.11.2018 2 2. ASSESSEE IS A COMPANY CARRYING ON THE BUSINESS OF RENDERING CONSULTANCY SERVICES. FOR THE ASSTT. YEAR 2003-04, THEY HAVE FILED THEIR RETURN OF INCOME ON 2.12.2003 DECLARING THE LOSS OF RS.29,68,536/-. HOWEVER, THE ASSESSMENT WAS COMPLETED BY ORDER DATED 27.3.2006 MAKING FOLLOWING ADDITIONS: I) DEPRECIATION FOR SEPARATE CONSIDERATION 604539 II) PROVISION FOR BONUS 46961 III) EXPENSES PERTAINING TO EARLIER YEARS 148205 IV) CESSATION OF LIABILITY U/S 41(1) 1986551 V) TRAINING EXPENSES OF SH. NEELABH DALMIA 1834286 VI) SALARY EXPENSES 4345122 VII) FOREIGN TRAVELLING EXPENSES 10229341 VIII) OUT OF RENT 3035308 IX) ON ACCOUNT OF INTEREST EXPENSES 3370689 3. ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED CIT(A) CHALLENGING THE ADDITIONS FROM S.NOS. 4 TO 9 AS ENUMERATED ABOVE. LEARNED CIT(A) BY WAY OF IMPUGNED ORDER WHILE DELETING THE OTHER ADDITIONS SUSTAINED TWO ADDITIONS, NAMELY, RS.18,34,286/- DISALLOWING THE TRAINING EXPENSES OF ONE MR. NEELABH DALMIA AND RS.1,02,29,341/- DISALLOWING THE FOREIGN TRAVEL EXPENSES. HENCE, THE ASSESSEE IS IN THIS APPEAL BEFORE US CHALLENGING THE SUSTAINING OF THESE TWO ADDITIONS MADE BY DISALLOWING THE TRAINING AND FOREIGN TRAVEL EXPENSES RESPECTIVELY. 4. IN SO FAR AS THE TRAINING EXPENSES ARE CONCERNED, LEARNED AO DISALLOWED THE SAME ON THE GROUND THAT THE SAID EXPENSES INCURRED IN THE GARB OF TRAINING EXPENSES ON THE SON OF SHRI ANURAG DALMIA, WHO IS ADVISOR OF THE COMPANY AND ALSO THE DIRECTOR OF OTHER MAJOR COMPANIES OF DALMIA GROUP AND THEY ARE NOT RELATED TO THE BUSINESS OF THE COMPANY BUT ON THE OTHER HAND ARE OF PERSONAL EXPENSES IN NATURE. LEARNED CIT(A) CONFIRMED THE SAME. AT THE OUTSET, LEARNED AR FAIRLY SUBMITTED THAT THIS EXPENSE WAS CONSIDERED BY THE LEARNED AO NOT ONLY FOR THE ASSTT. YEAR UNDER CONSIDERATION BUT ALSO FOR THE ASSTT. YEARS 2002-03, 2004-05 AND 2005-06 3 ALSO WHERE IT HAS BEEN DISALLOWED AND HAS BEEN CONFIRMED BY THE LEARNED CIT(A) AS WELL AS THE TRIBUNAL. 5. WE HAVE GONE THROUGH THE ORDERS OF THE COORDINATE BENCHES OF THIS TRIBUNAL IN ITA NO.2720/DEL/2006 FOR ASSTT. YEAR 2002-03, ITA NO.495/DEL/2008 FOR THE ASSTT. YEAR 2004-05; AND ITA NO.886/DEL/2011 FOR THE ASSTT. YEAR 2005-06. FOR ALL THESE YEARS, A CONSISTENT VIEW HAS BEEN TAKEN BY THE LEARNED AO AS WELL AS APPELLATE FOR THIS EXPENSE IS IN NO WAY CONNECTED TO THE BUSINESS OF THE ASSESSEE AND IT IS PERSONAL IN NATURE. IN THE ABSENCE OF ANY CHANGE OF CIRCUMSTANCES PLEADED, WE FIND IT DIFFICULT TO TAKE A DIFFERENT VIEW TAKEN EARLIER AS WELL AS IN THE SUBSEQUENT TWO YEARS. BY RESPECTFULLY FOLLOWING THE SAME, WE DISMISS THIS GROUND UPHOLDING THE FINDING OF THE LEARNED CIT(A). 6. NOW COMING TO THE QUESTION OF FOREIGN TRAVEL EXPENSES, THIS ISSUE WAS ALSO CONSIDERED FOR QUITE A LONG TIME, NAMELY, FOR AY 1999-2000, 2001-02, 2002-03 AND 2004-05 BY TRIBUNAL IN ITA NOS.239/DEL/2003,ITA NO. 4922/DEL/2004 FOR AY 2001-02, ITA 2720/DEL.2006 FOR AY 2002-03 AND ITA NO.495/DEL/2008 FOR AY 2004-05. INITIALLY FOR THE AY 1999-2000 THIS ISSUE WAS REMANDED TO THE FILE OF THE LEARNED AO FOR VERIFICATION OF THE DETAILS SUBMITTED BY THE ASSESSEE AND BY CALLING THE ADDITIONAL DETAILS, IF ANY REQUIRED BY THE AO AND TO DECIDE THE ISSUE AFRESH. IN ALL THE SUBSEQUENT YEARS, THE TRIBUNAL FOLLOWED THIS FINDING OF THE COORDINATE BENCH FOR THE YEAR 199-2000 AND SET ASIDE THE ISSUE TO THE FILE OF THE LEARNED AO FOR LOOKING INTO THE MATTER AFRESH. THE EFFECT GIVING ORDERS FOR ALL THESE YEARS ARE FILED BEFORE US AND THEY FORM PART OF THE RECORD FROM PAGE 73 TO 78 OF THE PAPER BOOK. WE HAVE PERUSED THE ORDERS. IN ALL THESE YEARS, LEARNED AO ACCEPTED THE DETAILS FURNISHED BY THE ASSESSEE AND DELETED THE FOREIGN TRAVEL EXPENSES. AT NO POINT OF TIME ANY PART OF THIS TRAVEL EXPENSE WAS FOUND TO BE EITHER BOGUS OR FOR NON BUSINESS PURPOSES NOR WAS THERE ANY NECESSITY TO DISALLOW 4 ANY PORTION OF THESE EXPENSES. IN THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT FOR VERIFICATION OF THE CONSULTANCY FEE RECEIVED BY THE ASSESSEE TO JUSTIFY THE FOREIGN TRIPS, MATTER NEEDS TO BE SET ASIDE AND THE ISSUE HAS TO BACK TO THE FILE OF THE LEARNED AO, THOUGH IT LOOKS LIKE PERFORMING EMPTY FORMALITY WHICH THE LEARNED AO HAS CONSISTENTLY BEEN DOING AND FINDING THAT FOREIGN TRAVEL EXPENSES FOR ALL THESE YEARS WERE GENUINE AND FOR BUSINESS PURPOSES AND THERE WAS NO NEED TO DISALLOW EITHER WHOLE OR ANY PART OF THESE EXPENSES. WE, THEREFORE, SET ASIDE THE MATTER AND REMAND THIS ISSUE TO THE FILE OF THE LD. AO FOR VERIFICATION OF THE DETAILS RELATING TO THE FOREIGN TRAVEL AFTER GIVING AN OPPORTUNITY TO THE ASSESS OF BEING HEARD. ACCORDINGLY, THIS GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER, 2018. SD/- SD/- (PRASHANT MAHARISHI) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 TH NOVEMBER, 2018 VJ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 DRAFT DICTATED ON 30.11.2018 DRAFT PLACED BEFORE AUTHOR 30.11.2018 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS KEPT FOR PRONOUNCEMENT ON DATE OF UPLOADING ORDER ON THE WEBSITE FILE SENT TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.