India Yamaha Motor Pvt. Ltd., New Delhi V. DCIT (LTU), New Delhi

ITA 6233/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7262 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 05-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S N MEENA
• Keywords: Set aside
• Section: 143(3); 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C : NEW DELHI) SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER AND BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO. 6233/DEL/2016 (ASSESSMENT YEAR : 2011-12) INDIA YAMAHA MOTOR PVT. LTD. VS DCIT (LTU) FIRST FLOOR, THE GREAT EASTERN CENTRE, CIRCLE 1, 70, NEHRU PLACE BEHIND IFCI TOWER N EW DELHI NEW DELHI PAN : AABCI7552F ( APPELLANT ) (RESPONDEN T) ASSESSEE BY : SH. MUKESH SINGHAL, CA REVENUE BY : SH. S.N.MEENA, SR. DR DATE OF HEARING : 28 .01.2020 DATE OF ORDER : 31.01.2020 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, INDIA YAMAHA MOTOR PVT. LTD. NEW DELHI (HEREINAFTER REFERRED TO AS 'THE ASSESSEE) BY FILI NG THE AFORESAID APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATE D 03/10/2016 PASSED BY LD. COMMISSIONER OF INCOME TAX(APPEALS)-2 2, NEW DELHI QUA THE ASSESSMENT YEAR 2011-12 ON THE GROU NDS INTER ALIA THAT: ITA NO. 6233/DEL/ 2016) 2 ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LE ARNED CIT (APPEALS) HAS ERRED BOTH ON FACTS AND IN LAW IN CON FIRMING THE DISALLOWANCE OF PART AMOUNT OF PAYMENTS MADE TO HOTEL RUTUGANDH, DIWALI & CELEBRATION EXPENSES, AND SHORT - DEDUCTION OF TAX AT SOURCE. 2.ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE L EARNED CIT (APPEALS) HAS ERRED BOTH ON FACTS AND IN LAW IN CON FIRMING THE DISALLOWANCE OF AN AMOUNT OF RS. 9,90,135/- ON ACCOUNT OF PAYMENTS TO HOTEL RUTUGANDH TOWARDS CONFERENCE O F DEALERS HELD BY THE APPELLANT, ON THE ALLEGED GROUN D THAT THESE EXPENSES ARE NOT GENUINE, WITHOUT APPRECIATIN G THE EVIDENCE ON RECORD. 3.ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (APPEALS) HAS ERRED BOTH ON FACTS AND I N LAW IN CONFIRMING THE DISALLOWANCE OF AN AMOUNT RS. 10,09, 085/- I.E. 20% OF THE TOTAL AMOUNT OF RS. 50,45,424/- INCURRED TOWARDS DIWALI AND CELEBRATION EXPENSES, WITHOUT APPRECIATI NG THAT THESE EXPENSES WERE TO BE INCURRED AS PART OF BUSIN ESS EXPENDITURE OF THE APPELLANT, AND ALSO THE MATERIAL ON RECORD. 4.ON THE FACTS AND CIRCUMSTANCES OF THE CASE,THE LE ARNED CIT (APPEALS) HAS ERRED BOTH ON FACTS AND IN LAW IN CON FIRMING THE DISALLOWANCE OF AN AMOUNT RS. 1,80,495/- UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961, WITHOUT APPR ECIATING THE EVIDENCE ON RECORD. 5.THE APPELLANT RESERVES ITS RIGHT TO ADD, DELE TE, AMEND AND/OR SUBSTITUTE ANY OF THE GROUNDS OF APPEAL BEFO RE OR AT THE TIME OF HEARING OF THE APPEAL. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE: THE ASSESSEE IS INTO THE BUSINESS OF MANUFACTURING, ASSEMBLING, INSTALLING, PRODUCING, A LTERATION, FABRICATION, REMODELING, PURCHASE, SALE DESIGNING, DEVELOPMENT, REPAIR, PROCUREMENT, IMPORT, EXPORT OF MOTORCYCLES AND PARTS THEREOF DURING THE YEAR UNDER ASSESSMENT. AO MADE D ISALLOWANCE OF RS. 9,90,135/- ON ACCOUNT OF PAYMENT TO HOTEL R UTUGANDH TOWARDS CONFERENCE OF DEALERS HELD BY THE ASSESSEE COMPANY ON THE ITA NO. 6233/DEL/ 2016) 3 GROUND THAT THE BILLS FURNISHED BY ASSESSEE COMPANY DO NOT CARRY THE SERVICE TAX CHARGEABLE ON SUCH SERVICES UNDER T HE SERVICE TAX ACT NOR THE BILL CARRIES SERVICE TAX REGISTRATION N O., NOR THE BILL HAS BEEN CONFIRMED BY HOTEL RUTUGANDH CONCERNED BY FILING REPLY TO THE LETTER NO. 713 DATED 11.02.2015 ISSUED BY TH E AO. 3. AO ALSO DISALLOWED AN AMOUNT OF RS. 2,16,682/- A ND 48,28,742/- CLAIMED BY THE ASSESSEE ON ACCOUNT OF C ELEBRATION EXPENSES AND DIWALI EXPENSES RESPECTIVELY AND THERE BY FRAMED THE ASSESSMENT U/S 143(3) OF THE ACT. 4. ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WH O HAS PARTLY ALLOWED THE APPEAL. FEELING AGGRIEVED THE ASSESSEE COMPANY HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PR ESENT APPEAL. 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVE OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. GROUND NO. 1 6. GROUND NO 1 IS GENERAL IN NATURE, HENCE, NEEDS N O SPECIFIC FINDINGS. GROUND NO. 2 7. AO AS WELL AS LD. CIT(A) HAS MADE DISALLOWANCE O F AMOUNT OF RS. 9,90,135/- CLAIMED BY THE ASSESSEE COMPANY O N ACCOUNT OF ITA NO. 6233/DEL/ 2016) 4 PAYMENT TO HOTEL RUTUGANDH TOWARDS CONFERENCE OF DE ALERS HELD BY THE ASSESSEE COMPANY ON THE GROUND THAT THE BILLS F URNISHED BY THE ASSESSEE DOES NOT CARRY SERVICE TAX CHARGEABLE, SER VICE TAX REGISTRATION NO. AND THE SAME HAVE NOT BEEN VERIFIE D BY THE HOTEL CONCERNED. 7.1 LD. AR FOR THE ASSESSEE CONTENDED THAT THE SER VICE TAX WAS NOT APPLICABLE TO THE HOTEL INDUSTRY DURING THE YEA R UNDER ASSESSMENT AND BROUGHT ON RECORD FINANCE ACT, 2011 WHEREBY SERVICE TAX WAS APPLIED TO THE HOTEL BUSINESS. SINC E, FINANCE ACT, 2011 HAS BEEN MADE EFFECTIVE FOR THE FINANCIAL YEAR 2011-12, THE SAME IS NOT APPLICABLE TO THE YEAR UNDER ASSESSMENT , SO THERE WAS NO REQUIREMENT ON THE PART OF THE HOTEL CONCERNED T O PUT SERVICE TAX REGISTRATION NO. ON THE BILL. 7.2 FURTHERMORE, WHEN ASSESSING OFFICER HAS NOT D ISPUTED THE CONVENING OF THE CONFERENCE AND THE DETAIL OF EXPEN SES HAS BEEN DULY BROUGHT ON RECORD, NOW AVAILABLE AT PAGE 3 OF THE PAPER BOOK, AND HOTEL BILLS ARE AVAILABLE AT PAGE 5 TO 12, THE SAME CANNOT BE DISALLOWED ON THE BASIS OF CONJECTURE AND SURMISES AS WELL AS ON THE BASIS OF WRONG NOTION THAT THE BILLS DO NOT CON TAIN THE DETAIL AS TO THE PAYMENT OF SERVICE TAX, WHICH WAS NOT APPLIC ABLE ON THAT DATE. MOREOVER, ASSESSEES AUDITED ACCOUNTS HAVE NE VER BEEN DISPUTED BY THE AO. IN THESE CIRCUMSTANCES, AO WA S NOT REQUIRED ITA NO. 6233/DEL/ 2016) 5 TO GET THE VERIFICATION OF THE BILLS FROM THE HOTEL CONCERNED. SO, WE ARE OF THE CONSIDERED VIEW THAT AO AS WELL AS LD. C IT(A) HAVE ERRED IN DISALLOWING THE HOTEL EXPENSES BILL AND AS SUCH THE ADDITION OF RS.9,90,135/- MADE ON THIS ACCOUNT IS ORDERED TO BE DELETED, HENCE, GROUND NO. 2 IS DETERMINED IN FAVOUR OF THE ASSESSEE. GROUND NO. 3 8. LD. CIT(A) RESTRICTED DISALLOWANCE MADE BY THE AO TO 20% OF RS. 50,45,424/-. WHEN WE EXAMINE THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGHT OF THE CONTENTION RAISED B Y THE ASSESSEE COMPANY THAT THESE EXPENSES HAVE BEEN INCURRED FOR THE BENEFIT OF EMPLOYEES AND HAS A DIRECT CONNECTION WITH THE BUSI NESS OF THE ASSESSEE COMPANY, THE SAME ARE NOT ALLOWABLE BECAUS E ASSESSEE HAS ALREADY CLAIMED EXPENSES TOWARDS EMPLOYEES WELFARE WHICH IS A SEPARATE HEAD AND HAS BEEN ALLOWED AS SUCH BY THE R EVENUE. 9. HOWEVER, IN THE TOTALITY OF FACTS AND CIRCUM STANCES, WE ARE OF THE CONSIDERED VIEW THAT LD. CIT(A) HAS FAIRLY AND REASONABLY MADE THE DISALLOWANCE TO THE TUNE OF RS. 10,09,085/ - I.E. @ 20% OF THE TOTAL AMOUNT OF RS. 50,45,424/-. EVEN OTHERWISE NO DETAIL OF SUCH EXPENSES INCURRED ON STAFF ON THE OCCASION OF THE DIWALI HAS BEEN FILED. SO, WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO SCOPE TO INTERFERE INTO FINDINGS RETURNED BY LD. CIT(A). HENCE, GROUND NO. 3 IS DETERMINED AGAINST THE ASSESSEE. ITA NO. 6233/DEL/ 2016) 6 GROUND NO. 4 10. GROUND NO. 4 HAS NOT BEEN PRESSED BY THE LD . AR FOR THE ASSESSEE. 11. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE PRESEN T APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST JANUARY SD/- SD/- (N.K.BILLAIYA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31/01/ 2020 BR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT(A), NEW DELHI. AR, ITAT NEW DELHI. DATE OF DICTATION 29/01/2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 29/01/2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER ITA NO. 6233/DEL/ 2016) 7