Shri S.Abdul Kader, CHENNAI V. DCIT, CHENNAI

ITA 584/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61335 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 11-07-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 19-03-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VI KRAMADITYA
• Assessee Lawyers: S SRIDHAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.584/MDS/2012 (ASSESSMENT YEAR: 2008-09) MR. S.ABDUL KADER, C/O. S.SRIDHAR, ADVOCATE, NEW NO.14, OLD NO.82, FLAT NO.5 1 ST AVENUE, INDIRA NAGAR, ADYAR, CHENNAI-600 020. PAN:AABPS8625C VS. THE DEPUTY COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE-III CHENNAI-600 034. (APPELLANT) (RESPONDENT) APPELLANT BY : MR. S.SRIDHAR, ADVOCAT E RESPONDENT BY : MR. VIK RAMADITYA, JCIT DATE OF HEARING : 11 TH JULY, 2012 DATE OF PRONOUNCEMENT : 11 TH JULY, 2012 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE APPEAL HAS BEEN FILED BY THE ASSESSEE IMPUGNIN G THE ORDER OF THE CIT(A) VIII, CHENNAI DATED 12.01. 2012. 2. THE ASSESSEE IS A PROPRIETOR OF M/S. NEW SUN INTERNATIONAL TRAVEL AGENCY. THE ASSESSEE FILED RET URN OF INCOME RELEVANT TO THE ASSESSMENT YEAR 2008-09 ON 30.09.2008 DECLARING INCOME OF ` 16,73,154/-. THE CASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY AND NOTICE U NDER SECTION 143(2) WAS ISSUED ON 19.8.2009. THE ASSESSI NG ITA NO.584/MDS/2012 2 OFFICER VIDE ASSESSMENT ORDER DATED 29.12.2010 OBS ERVED THAT AGAINST THE GROSS COMMISSION OF ` 49.33 LAKHS, THE ASSESSEE CLAIMED TO HAVE ALLOWED REBATE FOR ` 26.94 LAKHS TO THE CUSTOMERS. NEITHER SUCH RECEIPTS NOR PAYMENTS W ERE REFLECTED IN THE PROFIT AND LOSS ACCOUNT FOR THE RE LEVANT PERIOD. DURING THE ASSESSMENT YEAR 2007-08 AN AMOUNT OF ` 4.00 LAKHS WAS DISALLOWED ON ACCOUNT OF REBATES TO CUST OMERS ON THE POINT OF PURCHASE OF AIR TICKETS. AS PER THE CO NTENTION OF THE ASSESSEE SUCH REBATES ARE NOT SHOWN ON THE TIC KETS ISSUES TO THE CUSTOMERS. DURING THE CURRENT ASSESSM ENT YEAR I.E. 2008-09, THE ASSESSING OFFICER MADE DISALLOWAN CE FOR THE SIMILAR AMOUNT OF ` 4.00 LAKHS ON ESTIMATE BASIS. THE ASSESSEE HAD CLAIMED EXPENDITURE ON ACCOUNT OF VEHI CLE MAINTENANCE AND PETROL EXPENSES ` 2.50 LAKHS AND ` 2.82 LAKHS RESPECTIVELY. OUT OF THE SAID AMOUNT 1/3 RD OF SUCH EXPENSES I.E. ` 1.77 LAKHS WAS DISALLOWED BY THE ASSESSING OFFICER CONSIDERING IT TO BE PERSONAL IN NATURE. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSESSE E PREFERRED AN APPEAL BEFORE THE CIT(A). THE CIT(A) V IDE ORDER DATED 12.1.2012 PARTLY ALLOWED THE APPEAL OF THE AS SESSEE. ITA NO.584/MDS/2012 3 HOWEVER, THE CIT(A) SUSTAINED THE ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF 1/3 RD DISALLOWANCE OF MOTOR VEHICLE MAINTENANCE AND RUNNING EXPENSES AND ` 4.00 LAKHS ON ACCOUNT OF REBATES GIVEN TO THE CUSTOMERS. TH E ASSESSEE HAS ASSAILED THE ORDER OF THE CIT(A) ON TH E ABOVE SAID TWO GROUNDS BEFORE THE TRIBUNAL. 3. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF THE LOW ER AUTHORITIES. THE ASSESSEE IS IN THE BUSINESS OF TR AVEL AGENCY. IN ORDER TO ATTRACT CUSTOMERS, IT IS COMMON PRACTI CE TO GIVE DISCOUNTS AND REBATES ON THE TICKETS. ADMITTEDLY, S UCH REBATES ARE NOT SHOWN ON THE TICKETS ISSUED TO THE CUSTOMER S. SOME ARE NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT AS WE LL. THE ASSESSING OFFICER AND THE CIT(A) HAVE DISALLOWED TH E CLAIM OF THE ASSESSEE MERELY ON PRESUMPTION BASIS. IN THE I NTEREST OF JUSTICE & EQUITY , WE DEEM IT APPROPRIATE TO REDUCE THE AMOUNT FROM ` 4.00 LAKHS TO ` 2.00 LAKHS (RUPEES TWO LAKHS ONLY). THEREFORE, WE CONFIRM ADDITION OF ` 2,00,000/- WITH REGARD TO ITA NO.584/MDS/2012 4 REBATES ON TICKETS. THIS GROUND OF APPEAL OF THE AS SESSEE IS PARTLY ALLOWED. 4. THE SECOND GROUND OF APPEAL IS WITH REGARD TO DISALLOWANCE OF MAINTENANCE AND PETROL EXPENSES OF VEHICLE. THE COUNSEL FOR THE ASSESSEE CATEGORICALLY STATED T HAT VEHICLES/CARS ARE BEING USED BY THE PROPRIETOR AN D STAFF WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS ONLY. THE CIT(A) HAS ERRED IN COMING TO THE CONCLUSION THAT S INCE THE ASSESSEE IS IN THE BUSINESS OF SALE OF AIR TICKETS, THEREFORE, USE OF MOTOR VEHICLES FOR PERSONAL USE CANNOT BE DE NIED. WE DO NOT AGREE WITH THE FINDINGS OF THE CIT(A) AND TH E ASSESSING OFFICER ON THIS ISSUE. BUSINESS OF TRAVEL AGENCY IS VERY COMPETITIVE. THE PERSONS DEALING IN TRAVEL AGE NCIES IN ORDER TO WOW THE CUSTOMERS, OFFER HUGE REBATE ON TICKETS AS WELL AS OBLIGE THE CUSTOMERS BY PROVIDING TRANSPORT FACILITIES ALSO. WE ARE OF THE CONSIDERED OPINION THAT ENTIRE EXPENSES CLAIMED BY THE ASSESSEE ON ACCOUNT OF MAINTENANCE A ND FUEL EXPENSES OF THE VEHICLES NEEDS TO BE ALLOWED. ACCOR DINGLY, WE ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. ITA NO.584/MDS/2012 5 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED IN THE ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON WEDNESDAY, THE 11 TH DAY OF JULY, 2012 AT CHENNAI. SD/- SD/- ( ABRAHAM P.GEORGE ) ( VIKAS AWASTHY ) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 11 TH JULY, 2012. SOMU COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F .