Rishabh Ramesh Jain, Nashik V. Income-tax Officer,

ITA 622/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1757 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 26-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 01-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS NISHTHA TIWARI
• Keywords: Business expenditure; Corroborative evidences

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , ! , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.622/PN/2014 #& & / ASSESSMENT YEAR : 2009-10 MR. RISHABH RAMESH JAIN, SIRSOLI ROAD, NEAR MEHRUN LAKE, JALGAON PAN NO. AAYPJ6440M . / APPELLANT V/S ITO, WARD - 1(1), JALGAON . / RESPONDENT . / ITA NO.897/PN/2014 #& & / ASSESSMENT YEAR : 2009-10 ITO, WARD - 1(1), JALGAON . / APPELLANT V/S MR. RISHABH RAMESH JAIN, SIRSOLI ROAD, NEAR MEHRUN LAKE, JALGAON PAN NO. AAYPJ6440M . / RESPONDENT / ASSESSEE BY : SHRI PRAMOD SHINGTE / REVENUE BY : MRS. NISHTHA TIWARI / ORDER PER R.K.PANDA, AM : THESE ARE CROSS APPEALS. THE FIRST ONE IS FILED BY THE AS SESSEE AND THE SECOND ONE FILED BY THE REVENUE AND ARE DIRECTE D AGAINST THE ORDER DATED 10-02-2014 OF THE CIT(A)-II, NASHIK RELATING TO / DATE OF HEARING :02.06.2016 / DATE OF PRONOUNCEMENT:03.06.2016 2 ITA NOS. 622 AND 897/PN/2014 ASSESSMENT YEAR 2009-10. FOR THE SAKE OF CONVENIENCE THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND IS A DIRECTOR OF THE COMPANY KNOWN AS RISHABH METALS AND CHEMICALS PVT. LTD. FROM WHERE HE HAS SHOWN SALARY OF RS.9 0,000/-. HE HAS ALSO RECEIVED SALARY OF RS.60,000/- FROM SIDDHARTH CARBOCHEM PRODUCTS LTD. AS DIRECTOR. AS PER THE AIR INFORMATION IT WAS REPORTED THAT THE ASSESSEE HAD INCURRED EXPENSES OF RS.18,03,389/- FROM HIS CITY BANK CREDIT CARD WHICH WAS UT ILIZED BY THE ASSESSEE FOR THE PURPOSE OF EXPENDITURE. THE AO AS KED THE ASSESSEE TO EXPLAIN THE TRANSACTIONS. INITIALLY THE ASSES SEE SUBMITTED THAT THE TRANSACTIONS DO NOT BELONG TO HIM AND THE ASS ESSEE REFUSED TO ADMIT AND ACCEPT THE TRANSACTION AS BELONGING TO HIM. HE ALSO DENIED THE RESPONSIBILITY AND LIABILITY OF THE SAID TRANSACTION. SUBSEQUENTLY, ON BEING FURTHER CONFRONTED BY THE AO IT W AS SUBMITTED THAT THE EXPENSES WERE INCURRED BY HIM ON BE HALF OF THE COMPANY RISHABH METALS AND CHEMICALS PVT LTD. THE ASS ESSEE FILED A COPY OF THE RESOLUTION PASSED AT THE MEETINGS OF TH E BOARD OF DIRECTORS ON 10-04-2006 ACCORDING TO WHICH THE EXPENSE S OF THE COMPANY, OFFICE ELECTRICITY BILLS, STAFF WELFARE EXPENSES, OFFICE TELEPHONE EXPENSES ETC. SHALL BE PAID THROUGH CREDIT CARD OF MR. RISHABH RAMESH JAIN AND THE COMPANY SHALL SETTLE THE CRED IT CARD BILLS DIRECTLY IN FAVOUR OF THE BANK. THE AO, THEREFORE, HELD THAT THE ASSESSEE IS CHANGING HIS STATEMENT AT EVERY STAGE. ONL Y WHEN THE FACTUAL POSITION WAS BROUGHT TO THE NOTICE OF THE ASSESSEE, HE FILED T HE RESOLUTION WHICH IS NOTHING BUT AN AFTERTHOUGHT. ACCORDING TO THE AO, HAD THERE BEEN SUCH REAL RESOLUTION THE ASSESSEE CO ULD HAVE VERY WELL SUBMITTED AT THE FIRST INSTANCE WHEN HE EVEN DENIED T HE 3 ITA NOS. 622 AND 897/PN/2014 TRANSACTION. APPLYING THE PROVISIONS OF SECTION 2(24)(IV) TH E AO HELD THAT THE VARIOUS EXPENSES INCURRED BY THE ASSESSEE AR E HIT BY THE SAID PROVISIONS. HE ACCORDINGLY TREATED THE SAME AS INCO ME OF THE ASSESSEE U/S.2(24) OF THE I.T. ACT. WHILE DOING SO, HE RELIE D ON THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF R AVI PRAKASH KHEMKA VS. CIT REPORTED IN 295 ITR 33. THE A O ACCORDINGLY MADE ADDITION OF RS.18,03,389/-. 3. BEFORE CIT(A) THE ASSESSEE VEHEMENTLY CHALLENGED THE ADDITION MADE BY THE AO. THE ASSESSEE FURNISHED ALL THE BILLS WHICH WERE PAID THROUGH THE CREDIT CARDS OF CITY BANK AND DEUTSCHE BANK WHICH WERE IN THE NAME OF THE ASSESSEE AND OBTAINED BY THE C OMPANY RISHABH METALS AND CHEMICALS PVT. LTD. AND SIDDHARTH CARBO CHEM PRODUCTS. LTD.. IT WAS SUBMITTED THAT THE COMPANIES HA VE BACKED SUCH PAYMENT OF CREDIT CARDS BY NECESSARY BOARD RESOLU TION PASSED IN THE MEETINGS OF THEIR BOARD OF DIRECTORS. THE VARIOUS CORRESPONDENCES BETWEEN THE ASSESSEE AND THE AO WER E FILED BEFORE THE CIT(A). IT WAS SUBMITTED THAT THERE WAS REASONABLE CIRCUMSTANCES FOR ASSESSEES INITIAL DISOWNING OF THE CREDIT CARD EXPENSES SINCE THE AO HAD COMMUNICATED INADEQUATE INFORM ATION CONTAINED IN THE AIR INFORMATION. THE ASSESSEE FILED AFFIDAVIT S ISSUED BY THE 2 COMPANIES TO SUBSTANTIATE THAT THEY HAVE AUT HORIZED THE ASSESSEE TO INCUR THE EXPENSES THROUGH HIS CREDIT CARD S WHICH WAS TO BE REIMBURSED BY THESE COMPANIES. 4. BASED ON THE VARIOUS SUBMISSIONS FILED BY THE ASSESSEE THE LD.CIT(A) CALLED FOR A REMAND REPORT FROM THE AO. AFTER CON SIDERING THE REMAND REPORT OF THE AO THE LD.CIT(A) SUSTAINED THE ADDITION OF RS.8,25,245/- AND DELETED THE BALANCE ADDITION BY OBSERVING AS UNDER : 4 ITA NOS. 622 AND 897/PN/2014 8. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER, TH E APPELLANT'S SUBMISSIONS, THE A.O'S REMAND REPORT AND THE MATERIALS ON RECORD. THE GROUNDS RAISED BY THE APPELLANT ARE DEALT WITH AS UNDE R:- THE FIRST GROUND RELATES TO THE ADDITION OF RS. 18,03, 388/- U/S 2(24)(IV) ON ACCOUNT OF PAYMENT USING CREDIT CARDS IN THE NAME OF THE APPELLANT. THERE IS NO DISPUTE REGARDING THE FACT THAT THESE EXPE NSES ARE PAID BY THE TWO COMPANIES NAMELY RMCPL AND SCPL USING THE CR EDIT CARDS IN THE NAME OF THE APPELLANT. THE BREAK-UP OF THE EXPENSES I S AS UNDER : TELEPHONE EXPENSES RS.5,21,124/- STAFF WELFARE RS.3,94,312/- CETL RS.22,126/- BOOKS & PERIODICALS RS.2,661/- PURCHASE RS.85,336/- ELECTRICITY RS.3,14,780/- REPAIR & MAINTENANCE MOTOR CAR RS.19,824/- TRAVELLING RS.4,43,224/- --------------------- TOTAL DISALLOWANCE RS.18,03,388/- --------------------- ALL THE ABOVE PAYMENTS ARE BY CHEQUES ISSUED BY RESPECTI VE COMPANIES. 8.1 THE APPELLANT HAS FURNISHED DETAILS OF THE ABOVE EXPENSES WITH SOME SUPPORTING EVIDENCE. THE TEST-CHECK OF SUCH DETAILS AND SUPPORTING EVIDENCES INDICATES THAT SOME OF SUCH EXPENSES ARE INCURR ED FOR THE BUSINESS OF THE SAID TWO COMPANIES, AND SOME OF THE EXPEN SES CAN BE SAID TO BE FOR PERSONAL PURPOSES. FOR INSTANCE, THE APPE LLANT'S CREDIT CARD HAS BEEN USED TO PAY THE ELECTRICITY EXPENSES OF RS. 3,1 4,780/- OF THE OFFICE PREMISES OF RMCPL AND SCPL AT EROS THEATRE BUIL DING, MUMBAI. THE APPELLANT HAS FURNISHED THE SUPPORTING EVIDENCE IN THIS REGARD. SIMILARLY, THE APPELLANT HAS PROVIDED THE DETAILS OF TELEPHONE EXPENSES MONTH WISE/PERIOD WISE. THE DETAILS OF SUCH TELEPHONE E XPENSES OF RS. 5,21,124/- PAID BY THE TWO COMPANIES THROUGH THE AP PELLANT'S CREDIT CARD SHOW THAT THE PAYMENTS ARE FOR THE FOLLOWING:- 1. LANDLINE PHONES, FAX, INTERNET CONNECTION. 2. MOBILE PHONES OF THE EMPLOYEES. 3. MOBILE PHONES OF THE DIRECTORS OF THE TWO COMPANIES IN CLUDING THE APPELLANT. THE MAXIMUM PAYMENTS/EXPENSES ARE IN RESPECT OF MOBILE PHONES OF THE EMPLOYEES AND DIRECTORS. THE APPELLANT HAS PROVIDE D THE MOBILES PHONE NUMBERS, NAMES OF THE EMPLOYEES AND THE BILL AMO UNTS. THE EXAMINATION OF THE SAID EXPENSES PARTY WISE/ PERSON-WISE REVEALS THAT THE TELEPHONE EXPENSES PERTAINING TO THE APPELLANT AR E TO THE TUNE OF ABOUT RS.32,311/- ONLY. THE BALANCE AMOUNT OF RS.4,8 8,813/- (RS. 5,21,124/- - RS. 32,311/-) PERTAINS TO OTHER TELEPHON ES / MOBILES WHICH ARE REGISTERED IN THE NAMES OF THE TWO COMPANIES, EMPL OYEES AND OTHER DIRECTORS. 8.2 REGARDING THE TRAVELLING EXPENSES OF RS. 4,43,224/ - PAID THROUGH THE APPELLANT'S CREDIT CARD, THE APPELLANT HAS FURNISHED D ETAILS OF AIR TRAVELS BY HIM AND HIS MOTHER (WHO IS THE MD OF RMCPL) TO DEL HI, CHENNAI, KOLKATA, INDORE AND AURANGABAD AMOUNTING RS.1,42,488 /-. NO DETAILS 5 ITA NOS. 622 AND 897/PN/2014 HAVE BEEN FURNISHED FOR THE BALANCE AMOUNT. OUT OF T HE AMOUNT OF RS. 1,42,488/-, AN AMOUNT OF RS. 44,602/- HAS BEEN INCURR ED BY THE APPELLANT'S MOTHER. THEREFORE, RS.3,98,622/- (RS.4,43, 224 RS. 44,602) CAN BE SAID TO BE INCURRED BY THE TWO COMPANIES FOR T HE APPELLANT. IN OTHER WORDS, THESE EXPENSES OF RS. 3,98,622/- PERTAIN TO THE APPELLANT. AS FAR AS STAFF WELFARE EXPENSES OF RS.3,94,312/-, THEY RELATE TO HOTEL/RESTAURANT EXPENSES. TO THAT EXTENT, THESE EXPEN SES ARE BY THE TWO COMPANIES FOR THE PERSONAL PURPOSES OF THE APPELLANT. T HE OTHER SMALL EXPENSES OF REPAIR & MAINTENANCE OF CAR, PURCHASE OF C OMPUTER & CETL APPEAR TO BE INCURRED FOR THE BUSINESS OF THE COMPANIE S. FROM THE ABOVE DISCUSSIONS, THE FOLLOWING EXPENSES CAN BE CONSIDERED FOR DISALLOWANCE U/S 2(24)(IV) OF THE I.T. ACT:- 1. TELEPHONE EXPENSES PERTAINING TO THE APPELLANT RS.3 2,311/- 2. TRAVELLING EXPENSES PERTAINING TO THE APPELLANT RS. 3,98,622/- 3. WELFARE EXPENSES PERTAINING TO THE APPELLANT RS.3,9 4,312/- ------------------ TOTAL RS.8,25,245/- ------------------ ACCORDINGLY, THE ADDITION OF RS.8,25,245/- IS CONFIRM ED. THIS GROUND IS PARTLY ALLOWED. 5. AGGRIEVED WITH SUCH PART RELIEF GIVEN BY THE LD.CIT(A) TH E ASSESSEE AS WELL AS THE REVENUE ARE IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : GROUNDS BY ASSESSEE : WHEREVER CONTEXT SO REQUIRE , THE FOLLOWING GROUNDS OF APPEAL & PRAYERS ARE WITHOUT PREJUDICE TO ONE ANOTHER AND IN ALTERNA TIVE 1. IN VIEW OF THE EVIDENCES ON RECORD , THE LEARNED CIT (A) ERRED IN RETAINING THE ADDITION OF RS . 8 , 25 , 245/- , MADE U/S. 2(24)(IV). THEREFORE , IT IS PRAYED TO CANCEL THE ADDITION RETAINED OF RS . 8 , 25 , 245 / - . 2. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THA T THE APPELLANT WAS A WORKING DIRECTORS IN BOTH THE COMPANIES AND THE MOBILE BILLS PAID OF RS . 32 , 311/- BY THE COMPANIES FOR THE MOBILE CONNECTION IN THE NAME OF APPELLANT WERE IN RELATION TO THE USE OF MOBILE F OR THE BUSINESS OF COMPANIES. THEREFORE , IT IS PRAYED TO CANCEL THE ADDITION OF RS . 32,311/- UPHELD U/S 2(24)(IV) ON ACCOUNT OF PAYMENT OF MOBILE BILLS OF APPELLANT. 3. IN VIEW OF THE FACTS AND EVIDENCES BROUGHT ON RECO RD BY THE APPELLANT, THE LEARNED CIT(A) ERRED IN RETAINING TH E ADDITION U/S. 2(24)(IV) MADE ON ACCOUNT OF TRAVELLING EXPENSES OF R S.3,98,622/- , WITHOUT APPRECIATING THAT APPELLANT WAS A WORKING DI RECTOR OF BOTH THE COMPANIES , THE EVIDENCES FURNISHED WERE BY WAY OF SAMPLE EVIDENCE S AND THE APPELLANT TRAVELLED FOR THE BUSINESS PURPOSES OF THE COMPANIES 6 ITA NOS. 622 AND 897/PN/2014 AND NOT FOR ANY PE R SONAL PURPOSE . THEREFORE, IT IS PRAYED TO CANCEL THE ADDITION OF RS. 3 , 98,622/- . 4. IN VIEW OF THE DETAILS OF WELFARE EXPENSES BROUGHT ON RECORD THE CIT(A) ERRED IN TREAT I NG ENTIRE WELFARE EXPENSES OF RS . 3 , 94 , 312/- INCURRED ON HOTEL BILLS , REFRESHMENT BILLS , ETC. AS THE EXPENSES INCURRED BY THE COMPANIES FOR THE PERSONAL PURPOSES OF APPELLANT AND ACCORDINGLY RETAINING THE ADDITION THEREOF U/S. 2(24)(IV) . HENCE , IT IS PRAYED TO CANCEL THE ADDITION OF RS . 3 , 94 , 312/- , UPHELD U/S. 2(24)(IV) ON ACCOUNT OF PAYMENT OF HOTEL , ETC . BIL L S . 5. APPELLANT CRAVES LEAVE TO ADD/AMEND/ALTER ANY GRO UNDS OF APPEAL AND /OR PRAYERS BEFORE OR AT THE TIME OF HEARING. GROUNDS BY REVENUE : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.C IT(A) ERRED IN RESTRICTING THE ADDITION OF RS.8,25,245/- AGAINST THE ADDITION OF RS.18,03,389/- MADE BY AO ON ACCOUNT OF TREATING THE EXPENSES DONE BY THE ASSESSEE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CI T(A) HAS ERRED IN TERMS OF GIVING RELIEF TO THE EXTENT OF RS.9 ,78,144/- ON THE SAME ISSUE WITH A WEAK VIEW THAT IT APPEARS TO BE INCURRED FOR THE EXPENSES OF THE COMPANIES. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER A NY OF THE GROUNDS OF APPEAL. 6. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ENTIRE EXPENDITURE INCURRED BY THE ASSESSEE THROUGH THE CRED IT CARDS ARE FOR THE BUSINESS OF THE 2 COMPANIES. THE COMPANIES HAVE DEB ITED SUCH EXPENSES IN THE PROFIT AND LOSS ACCOUNT. REFERRING TO THE INCOME-TAX RETURN OF RISHABH METALS AND CHEMICALS PVT. LTD. FOR A.Y. 2 009-10 THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE COM PANY HAS PAID FRINGE BENEFIT TAX ON THE TELEPHONE BILLS OF RS.2,58,580/- . SIMILARLY, IT HAS ALSO PAID FRINGE BENEFIT TAX ON THE TRAVELLING EXPENSES SHOWN AT RS.30,71,103/-. THE ABOVE TELEPHONE EXPENSES A ND TRAVELLING EXPENSES OF RISHABH METALS AND CHEMICALS PVT. L TD INCLUDES THE EXPENSES INCURRED THROUGH THE CREDIT CARD IN THE NAME OF THE RISHABH RAMESH JAIN, I.E. THE ASSESSEE. 7 ITA NOS. 622 AND 897/PN/2014 7. REFERRING TO THE COPY OF THE INCOME-TAX RETURN OF SID DHARTH CHEMCO PVT. LTD. THE LD. COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THE ASSESSEE HAS PAID FRINGE BENEFIT TAX ON THE TELEPHONE BILLS OF RS.6,62,271.20. SIMILARLY, IT HAS ALSO PAID FRINGE BENEFIT TAX ON TOURS AND TRAVELS OF RS.38,94,083/-. THE ABOVE TELEPHONE EXPENS ES AND TRAVELLING EXPENSES INCLUDE THE EXPENSES INCURRED THROUGH THE CREDIT CARD IN THE NAME OF MR.RISHABH RAMESH JAIN, I.E. THE ASSESSE E. HE SUBMITTED THAT THE ENTIRE EXPENSES INCURRED BY THE ASS ESSEE THROUGH THE CREDIT CARDS ARE WHOLLY AND EXCLUSIVELY FOR THE BUSIN ESS OF THE COMPANIES. REFERRING TO THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF JKH EXPORT VS. ACIT REPORTED IN 35 CCH 10 8 HE SUBMITTED THAT THE TRIBUNAL IN THE SAID DECISION HAS HELD T HAT WHERE PERSONAL EXPENDITURES ARE COVERED BY ASSESSEE UNDER FR INGE BENEFIT TAX FILED ALONG WITH RETURN OF INCOME, THE SAME HAS TO BE A LLOWED AS BUSINESS EXPENDITURE. 8. SO FAR AS THE EXPENSES DISALLOWED BY THE CIT(A) BEING T RAVELLING EXPENSES PERTAINING TO THE ASSESSEE, WELFARE EXPENSES A ND TELEPHONE EXPENSES ARE CONCERNED HE SUBMITTED THAT THE ASSESSE ES MOTHER IS THE MANAGING DIRECTOR OF M/S. RISHABH METALS AND CHEMICALS PVT. LTD. REFERRING TO THE PAPER BOOK HE SUBMITTED THAT ALL T HE DETAILS WERE FILED BEFORE THE CIT(A) BUT HE HAS NOT CONSIDERED IT P ROPERLY FOR WHICH HE HAS MADE DISALLOWANCE OF RS.8,25,245/-. 9. SO FAR AS THE DECISION RELIED ON BY THE AO IN THE CAS E OF RAVI PRAKASH KHEMKA VS. CIT REPORTED IN 295 ITR 33 IS CONCE RNED, HE SUBMITTED THAT THE SAME IS DISTINGUISHABLE AND NOT APPLICAB LE TO THE FACTS OF THE PRESENT CASE. IN THAT CASE THE COMPANY H AD PAID PERSONAL CREDIT CARD EXPENSES AND LIC PREMIUM OF THE AS SESSEE DIRECTOR FOR WHICH SUCH PAYMENTS WERE HELD AS ASSESSABLE 8 ITA NOS. 622 AND 897/PN/2014 U/S.2(24)(IV) OF THE I.T. ACT. HOWEVER, IN THE INSTANT CASE TH ERE IS NO SUCH PERSONAL EXPENDITURE PAID THROUGH THE CREDIT CARD OR LIC PREMIUM PAID AND THE ENTIRE EXPENDITURE HAS BEEN WHOLLY AND EXCLUSIVELY INCURRED FOR THE BUSINESS PURPOSE WHICH WER E SUBSEQUENTLY REIMBURSED TO THE ASSESSEE. THEREFORE, TH ERE IS NO QUESTION OF ANY PERSONAL ELEMENT AND THEREFORE NO DISALLOWA NCE CAN BE MADE. 10. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND WHILE SUPPORTING THE ORDER OF THE AO SUBMITTED THAT THE ASSE SSEE WAS EVASIVE AT THE INITIAL STAGE AND DENIED THAT THE TRANSACT IONS BELONGING TO HIM. HE HAD DENIED THE RESPONSIBILITY AND LIABILITY OF THE S AID TRANSACTIONS. ONLY WHEN HE WAS CONFRONTED WITH THE CO PY OF THE CREDIT CARD ENTRIES THAT HE CAME FORWARD WITH A COPY OF THE RESOLUTION ACCORDING TO WHICH THE VARIOUS EXPENSES OF THE COMPANY PAID THROUGH THE CREDIT CARDS OF THE ASSESSEE SHALL BE R EIMBURSED TO HIM. THUS, THE ASSESSEE WAS CHANGING HIS STATEMENT AT E VERY STAGE. THE AO HAS CORRECTLY APPLIED THE PROVISIONS OF SECTION 2(2 4)(IV) OF THE ACT AND HELD THAT THE SAME IS TAXABLE IN THE HANDS OF T HE ASSESSEE. SHE SUBMITTED THAT THE RELIEF GRANTED BY THE CIT(A) IS NO T PROPER AND JUSTIFIED UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. SHE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE AO BE UPH ELD AND THE GROUNDS RAISED BY THE REVENUE SHOULD BE ALLOWED. 11. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. WE FIND THE AO MADE ADDITION OF RS.18,03,388/- IN THE HANDS OF THE ASSESSEE U/S.2(24)(IV) OF TH E I.T. ACT ON ACCOUNT OF PAYMENT USING CREDIT CARDS WHICH WERE IN THE 9 ITA NOS. 622 AND 897/PN/2014 NAME OF THE ASSESSEE. SINCE THESE EXPENSES WERE PAID B Y THE TWO COMPANIES NAMELY M/S. RISHABH METALS AND CHEMICALS PVT. LTD. AND SIDDHARTH CARBOCHEM PRODUCTS LTD., THE AO, APPLYING THE PROVISIONS OF SECTION 2(24(IV), MADE THE ADDITION IN THE HANDS OF THE AS SESSEE COMPANY. WE FIND THE LD.CIT(A) AFTER VERIFYING THE PAYMENTS/EXPENSES IN RESPECT OF MOBILE PHONES OF THE EM PLOYEES AND DIRECTORS AND THE TRAVELLING AND OTHER EXPENSES TO THE EXTENT OF DETAILS PROVIDED BY THE ASSESSEE ALLOWED RELIEF OF RS.9,78,143/ - AND SUSTAINED ADDITION OF RS.8,25,245/- WHICH ACCORDING TO HIM T HE ASSESSEE COULD NOT EXPLAIN. 12. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSES SEE THAT THE TWO COMPANIES HAVE PAID FRINGE BENEFIT TAX ON TELEPHON E EXPENSES AND TRAVELLING EXPENSES WHICH INCLUDE THE EXPENS ES INCURRED BY THE ASSESSEE THROUGH THE CREDIT CARDS AND THEREFORE NO DISALLOWANCE COULD HAVE BEEN SUSTAINED. SIMILARLY, THE EXPEN SES PERTAINING TO WELFARE EXPENSES ARE ALSO WHOLLY AND EXCLUS IVELY INCURRED FOR THE PURPOSE OF BUSINESS AND THEREFORE NO DIS ALLOWANCE COULD HAVE BEEN MADE. 13. SO FAR AS THE RELIEF GRANTED BY THE CIT(A) IS CONCERNE D, WE DO NOT FIND ANY INFIRMITY IN THE SAME SINCE AFTER VERIFICATION OF TH E FULL DETAILS HE HAS ALLOWED RELIEF. THEREFORE, THE RELIEF GRANTED BY THE CIT(A) BEING IN ORDER IS UPHELD. SO FAR AS THE AMOUNT SUST AINED BY HIM IS CONCERNED, IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT ALL THESE DETAILS ARE AVAILABLE IN THE PAPER BOOK AND IT WAS NOT PROPERLY PERUSED BY THE CIT(A) FOR WHICH HE HAS MADE DISALLOWANCE. FURTHER, IT IS ALSO THE SUBMISSION OF THE LD. CO UNSEL FOR THE ASSESSEE THAT SINCE FRINGE BENEFIT TAX HAS BEEN P AID BY BOTH 10 ITA NOS. 622 AND 897/PN/2014 THE COMPANIES ON ACCOUNT OF TELEPHONE EXPENSES AND TRA VELLING EXPENSES, THEREFORE, NO DISALLOWANCE COULD HAVE BEEN MADE . WE FIND SOME FORCE IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASS ESSEE. THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF JKH EXPORT (SUPRA) HAS HELD THAT WHERE PERSONAL EXPENDITURES ARE CO VERED BY ASSESSEE UNDER FRINGE BENEFIT TAX FILED ALONG WITH THE RETUR N OF INCOME, THE SAME HAS TO BE ALLOWED AS BUSINESS EXPENDITUR E. HOWEVER, IT IS NOT VERIFIABLE FROM THE DETAILS AS TO WHETHER THE EXPENSES INCURRED THROUGH THE CREDIT CARD ON ACCOUNT OF TRAVELLING AND TELEPHONE ARE INCLUDED IN THE TELEPHONE AND TRAVELLING EXPENSES OF BOTH THE COMPANIES ON WHICH FRINGE BENEFIT TAX HAS BE EN PAID. WE FURTHER FIND THE LD.CIT(A) HAS GIVEN A FINDING THAT THE ASSES SEE COULD NOT PRODUCE SUFFICIENT EVIDENCES REGARDING THE EXPENDITURE OF RS.8,25,245/- BEFORE HIM. CONSIDERING THE TOTALITY OF THE FACT S OF THE CASE AND IN THE INTEREST OF JUSTICE, WE RESTORE THIS ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE NATURE OF THESE EXPENSES OF RS.8,25,245/- S USTAINED BY LD.CIT(A) AND PROVE THAT THESE ARE INCURRED FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE COMPANY. THE ASSESSEE SHALL ALS O FILE DETAILS OF THE TRAVELLING AND TELEPHONE EXPENSES OF THE CO MPANIES AND SUBSTANTIATE THAT FRINGE BENEFIT TAX HAS BEEN PAID ON THESE EXPENSES. THE AO SHALL DECIDE THE ISSUE IN THE LIGHT OF OUR ABOVE DIRECTION AND AS PER FACT AND LAW AFTER GIVING DUE OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORD INGLY. GROUNDS RAISED BY THE REVENUE ARE DISMISSED AND THE GR OUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY PARTLY ALLOWED. 11 ITA NOS. 622 AND 897/PN/2014 14. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PA RTLY ALLOWED AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03-06-2016. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE ; DATED : 03 RD JUNE, 2016. ) *#,! -! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A ) - II, NASHIK 4. 5. 6. THE CIT-II, NASHIK $ ''(, (, / DR, ITAT, B PUNE; - / GUARD FILE. / BY ORDER , // TRUE COPY // // $ ' //TRUE /0 ' ( / SR. PRIVATE SECRETARY (, / ITAT, PUNE