Maharani of India, New Delhi V. ACIT, New Delhi

ITA 6202/DEL/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4167 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 05-10-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 24-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P N MEHTA
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-2, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A.NO. 6202 /DEL/201 5 A.Y. 20 12 - 13 MAHARANI OF INDIA, B-34, MALCHA MARG, CHANKYAPURI, NEW DELHI 110 021 (PAN:AAAFM6567A) VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 53(1), NEW DELHI (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. PN MEHTA, FCA DEPARTMENT BY : SH. ANIL SHARMA, SR. DR. ORDER ORDER ORDER ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 24.9.2015 OF THE LD. CIT(A)-18, NEW DELHI PERTAINI NG TO ASSESSMENT YEAR 2012-13 ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) IS WRONG IN CONFIRMING THE ADDITION OF RS. 6,61,220 /- ON ACCOUNT OF TRAVELING AND CONVEYANCE EXPENSES MADE BY AO. 2. THE ACIT IS WRONG IN DISALLOWING A SUM OF RS. 6,61,220/- UNDER THE HEAD TRAVELING AND CONVEYANCE EXPENSES AND THE CIT(A) IS WRONG IN CONFIRMING THE ADDITION ON ESTIMATE BASIS. 3. THE ADDITION HAS BEEN MADE ON SUSPICION AND SURMISES WITHOUT ANY MATERIAL ON RECORD. 4. THE ADDITION MADE IS AGAINST THE LAW AND FACTS O F THE CASE. 2 2. THE BRIEF FACTS OF THE CASE ARE THAT RETURN OF INCOME WAS FILED ON 29.9.2012 AT RS. 38,12,390/- AND PROCESSED U/S. 143(1) OF THE I. T. ACT ON THE SAME INCOME. ON SELECTION OF CASE OF SCRUTINY, NOTICE U/S. 143(2 ) OF THE I.T. ACT, 1961 WAS ISSUED ON 20.8.2013. SUBSEQUENTLY, NOTICE U/S. 142( 1) OF THE I.T. ACT, 1961 WAS ALSO ISSUED ON 19.5.2014. IN COMPLIANCE TO NOTICES , LD. AR OF THE ASSESSEE ATTENDED THE HEARING FROM TIME TO TIME AND FURNISHE D THE WRITTEN SUBMISSIONS AND REQUIRED DETAILS CALLED FOR. BOOKS OF ACCOUNTS AN D BILLS / VOUCHERS ETC. WERE PRODUCED AND PUT TO TEST. THEREAFTER, AO OBSERVED THAT ON PERUSAL OF P&L ACCOUNT OF THE ASSESSEE, IT WAS NOTICED THAT ASSESS EE HAS DEBITED RS. 66,12,203/- ON ACCOUNT OF TRAVELLING AND CONVEYANCE EXPENSES. HOWEVER, NO AMOUNT ON ACCOUNT OF USE OF ASSETS / FACILITIES BY THE ASSESSEE AND THEIR FAMILY MEMBERS HAS BEEN ADDED BACK BY THE ASSESSEE. ACCOR DINGLY, THE AO ADDED RS. 6,61,220/- VIDE HIS ORDER DATED 27.2.2015 PASSE D U/S. 143(3) OF THE I.T. ACT, 1961. 3. AGAINST THE ASSESSMENT ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO VIDE HIS IMPUGNED ORDER DATED 24.9.2 015 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 4. AGAINST THE ORDER OF THE LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. DURING THE HEARING, LD. COUNSEL OF THE ASSESSEE HAS FILED A PAPER BOOK CONTAINING PAGES 1 TO 17 HAVING THE COPY OF LETTER SENT TO ACIT DATED 18.2.2015; COPY OF WRITTEN SUBMISSIONS BEFORE THE CIT(A); COPY OF DETAILS OF FOREIGN TRAVELING EXPENSES; COPY OF DOMESTIC TRAVELLING EXPENSES AND COPY OF MONTH-WISE DETAILS OF CONVEYANCE EXPENSES. HE STATED THAT ASSESSEE DU RING THE YEAR SPENT A SUM OF RS. 66,12,203/- ON ACCOUNT OF TRAVELLING INCLUDING LOCAL TRAVELLING AND CONVEYANCE IN ORDER TO MEET THE COMPETITION AND TO OBTAIN THE ORDERS, AS A 3 RESULT THE SALES HAVE INCREASED BY RS. 8 CRORES AND IN THE SUBSEQUENT YEAR BY RS. 15 CRORES. THEREFORE, HE REQUESTED THAT THE EXPEN SES INCURRED ARE REASONABLE AND MAY BE ALLOWED. 6. ON OTHER HAND, LD. DR HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND STATED THAT THE ORDER OF THE LD. CIT(A) IS A WE LL REASONED AND THE SAME DOES NOT NEED ANY INTERFERENCE ON MY PART, HENCE, THE SA ME MAY BE UPHELD AND ACCORDINGLY, THE APPEAL OF THE ASSESSEE MAY BE DISM ISSED. 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES AND THE PAPER BOO K ALONGWITH ITS ENCLOSURES. AFTER PERUSING THE PAPER BOOK INCLUDING LETTER TO ACIT DATED 18.2.2015, COPY OF WRITTEN SUBMISSIONS BEFORE CIT(A), COPY OF DETAILS OF FOREIGN TRAVELLING EXPENSES, COPY OF DETAILS OF DOMESTIC TRAVELLING EXPENSES; AN D COPY OF MONTHWISE DETAILS OF CONVEYANCE EXPENSES, I FIND THAT AO HAS DISALLO WED THIS EXPENSE WITHOUT POINTING OUT ANY DEFECT IN THE BOOKS OF ACCOUNT OR IN THE EVIDENCE FILED BY THE ASSESSEE WHICH IS MERELY ON THE BASIS OF ESTIMATION AND ON PRESUMPTION AND ASSUMPTION ONLY, WHICH IS NOT PERMISSIBLE IN THE EY ES OF LAW. I ALSO FIND THAT THE SAID EXPENSES HAVE BEEN INCURRED BY THE ASSESSEE TO MEET THE COMPETITION FOR WHICH THE ASSESSEE HAS TO TRAVEL ABROAD TO OBTAIN T HE ORDERS AND TO KEEP IN CONSTANT TOUCH WITH THE BUYERS ABROAD AND FOR THIS PURPOSE THE ASSESSEES FIRM HAS TO EXPLORE NEW MARKETS FOR THE EXPORTS OF GOODS . IT WAS ALSO SEEN THAT THE SALE OF THE ASSESSEE HAS INCREASED BY RS. 8 CRORES AND IN THE SUBSEQUENT YEAR BY RS. 15 CRORES WHICH WAS ONLY POSSIBLE DUE TO THE EF FORTS MADE BY THE THREE WORKING PARTNERS. IN MY CONSIDERED OPINION, THE EX PENSES INCURRED BY THE ASSESSEE SEEMS TO BE GENUINE AND THEREFORE, I ACCEP T THE SAME AND ACCORDINGLY, DELETE THE ADDITION OF RS. 6,61,220/- ON ACCOUNT O F TRAVELLING AND CONVEYANCE EXPENSES MADE BY THE AO AND ALLOW THE GROUND THE A PPEAL OF THE ASSESSEE. 4 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/10/2016. SD/- [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 14/10/2016 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES