RISHI KUMAR RAJANI, MUMBAI V. ACIT 16(1), MUMBAI

ITA 709/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8033 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 11-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PURUSHOTAM KUMAR
• Keywords: Gift; Depreciation; Rule of consistency; Capital expenditure
• Section: 143(3)

Judgement Text

P A G E | 1 ITA NO. 709 /MUM/201 6 AY: 2011 - 12 RISHI KUMAR RAJANI VS. ACIT 16(1) IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, M UMBAI BEFORE SHRI P.K. BANSAL , VICE PRESIDENT AND SHRI RAVISH SOOD, JM ITA NO. 709 /MUM/201 6 ( / ASSESSMENT YEAR: 20 1 1 - 1 2 ) SHRI RISHI KUMAR RAJANI, 5 - A, BHAGWAT NIWAS, 2 ND FLOOR, PEDDAR ROAD, MUMBAI - 26 / VS. ACIT 16(1), MATRU MANDIR, MUMBAI 400 007 . ./ ./ PAN NO. AABPR0602C ( / APPELLANT) : ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENT BY : SHRI PURUSHOTAM KUMAR , D .R. / DATE OF HEARING : 30 .11 .2017 / DATE OF PRONOUNCEMENT : 20 .1 2 .2017 / O R D E R PER RAVISH SOOD, JUDICIAL MEMBER: THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER PASSED BY THE CIT(A) - 30 , MUMBAI, DATED 20.11.2015 WHICH IN ITSELF ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC. 143(3) OF THE P A G E | 2 ITA NO. 709 /MUM/201 6 AY: 2011 - 12 RISHI KUMAR RAJANI VS. ACIT 16(1) INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 10.03.2014 . THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAD RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL : - 1. THE COMMISSIONER OF INCOME TAX (APPEAL) - 30, MUMBAI (HEREINAFTER REFERRED TO AS THE CIT(A) ERR ED IN CONFIRMING 20% DISALLOWANCE OUT OF HOTEL & OTHER EXPENSES OF RS. 39,79,735/ - AMOUNTING TO RS. 7,95,987/ - INCLUDED IN FOREIGN TRAVEL EXPENSES DISALLOWANCE OF RS. 30,89,983/ - MADE BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 16(1), MUMBAI (HEREI NAFTER REFERRED TO AS THE ACIT), FOLLOWING THE ITAT DECISION IN APPELLANTS OWN CASE FOR THE INCOME TAX ASSESSMENT YEAR 2006 - 07. THE APPELLANT SUBMITS THAT THE FACTS FOR THE ASSESSMENT YEAR 2006 - 07 WERE DIFFERENT AS COMPARED TO THE FACTS FOR THE ASSESSMEN T YEARS 2007 - 08 TO 2009 - 10 AND THE CIT(A) OUGHT TO HAVE FOLLOWED THE ITAT DECISION IN THE APPELLANTS OWN CASE FOR THE ASSESSMENT YEARS 2007 - 08 TO 2009 - 10 WHEREIN IN ORDER OF THE CIT(A) WAS UPHELD CONFIRMING THE DISALLOWANCE OF 10% OF ONLY OTHER EXPENSES OUT OF THE ENTIRE FOREIGN TRAVEL EXPENSES. THE APPELLANT THEREFORE PRAYS THAT THE ACIT BE DIRECTED TO RESTRICT THE DISALLOWANCE TO 10% OF OTHER EXPENSES. 2. THE CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 5,30,432/ - MADE BY THE ACIT OUT OF MOTOR CAR EXPENSES. THE APPELLANT SUBMITS THAT THE ENTIRE EXPENSES OF MOTOR CAR HAS BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS AND THAT THE ACIT BE DIRECTED TO DELETE THE DISALLOWANCE OF RS. 5,30,432/ - MADE BY HIM ON THIS ACCOUNT. THE APPELLANTS CRAVE LEAVE TO, ADD TO, ALTER OR AMEND THE ABOVE GROUNDS OF APPEAL OR TO ADD A NEW GROUND OF APPEAL AT ANY TIME BEFORE HEARING OF THE APPEAL. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE WHO IS ENGAGED IN THE BUSINESS OF MANU FACTURE, TRADING AND EXPORT OF LADIES DESIGNER WEAR GARMENTS UNDER THE NAME AND STYLE OF M/S BIHARILAL FASHIONS HAD E - FILED HIS RETURN OF INCOME ON 30.09.2011 , DECLARING TOTAL INCOME AT RS. 79,69,220 / - . THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCES SED AS SUCH UNDER SEC. 143(1) OF THE ACT . THE CASE OF THE ASSESSEE WAS THEREAFTER SELECTED FOR SCRUTINY ASSESSMENT THROUGH CASS UNDER SEC. 143(2) . 3. THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE A.O OBSERVED THAT THE ASSESSEE HAD CLAIM ED A SUM OF RS. 92,69,949/ - AS P A G E | 3 ITA NO. 709 /MUM/201 6 AY: 2011 - 12 RISHI KUMAR RAJANI VS. ACIT 16(1) DEDUCTION ON ACCOUNT OF FOREIGN TRAVELLING EXPENSES. THE A.O DELIBERATING ON THE CLAIM OF THE ASSESSEE PERTAINING TO THE FOREIGN TRAVELLING EXPENSES OBSERVED THAT THE SAME WAS SIMILAR BY PLACED AS IN COMPARISON TO HER CLAIM TOW ARDS THE SAID EXPENSES IN THE PRECEDING YEARS, VIZ. A.Y(S). 2007 - 08, 2008 - 09, 2009 - 10 AND 2010 - 11, WHEREIN HIS PREDECESSOR HAD DISALLOWED 1/3 RD OF THE EXPENSES ON THE GROUND THAT THE SAME WERE NOT RELATED TO THE BUSINESS OF THE ASSESSEE. THE ASSESSEE IN OR DER TO FORTIFY HIS CLAIM OF FOREIGN TRAVELLING EXPENSES THEREIN FURNISHED WITH THE A.O DETAILS OF FOREIGN TRAVELLING EXPENSES INCURRED BY HIM DURING THE YEAR UNDER CONSIDERATION ALONG WITH THE DETAILS OF PLACES VISITED, THE PERIOD OF TRAVEL, NUMBER OF DAYS OF STAY AND FARE AND OTHER EXPENSES INCURRED DURING HIS STAY. THE ASSESSEE SUBMITTED BEFORE THE A.O THAT THE FOREIGN TRAVELLING EXPENDITURE WAS INCURRED BY HIM IN THE ORDINARY COURSE OF HIS BUSINESS. THE ASSESSEE FURTHER IN HIS ATTEMPT TO BUTTRESS HIS ENTITLEMENT TOWARDS THE AFORESAID CLAIM OF EXPENDITURE , THEREIN SUBMITTED THAT THOUGH THE EXPORTS DURING THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2011 - 12 HAD INCREASED BY 16.18% AS IN COMPARISON TO THE IMMEDIATE PRECEDING YEAR, I.E. A.Y. 2010 - 11, WHILE FOR THE FOREIGN TRAVELLING EXPENSES HAD WITNESSED A COMPARATIVE DECLINE BY 7.69%. HOWEVER, THE A.O NOT BEING PERSUADED TO SUBSCRIBE TO THE AFORESAID EXPLANATION OF THE ASSESSEE OBSERVED THAT THE AFORESAID COMPARATIVE ANALYSIS CARRIED OUT BY THE ASSESSEE IN TH E BACKDROP OF THE EXPORT SALES AND THE FOREIGN TRAVELLING EXPENSES AS IN COMPARISON TO THOSE FOR THE PRECEDING YEAR, VIZ. A.Y. 2010 - 11, WOULD IN NO WAY SUBSTANTIATE EITHER THE GENUINENESS OF THE EXPENSES OR THE FACT THAT THEY WERE INCURRED WHOLLY AND EXCLU SIVELY FOR HIS BUSINESS PURPOSE . THE A.O HOLDING A CONVICTION THAT PERSONAL ELEMENT IN THE FOREIGN TRAVELLING EXPENSES CLAIM ED BY THE ASSESSEE COULD NOT BE RULED OUT, THEREFORE, OBSERVING THAT 1/3 RD OF THE FOREIGN TRAVELLING EXPENSES WERE DISALLOWED BY HIS PREDECESSOR WHILE P A G E | 4 ITA NO. 709 /MUM/201 6 AY: 2011 - 12 RISHI KUMAR RAJANI VS. ACIT 16(1) FRAMING THE ASSESSMENT IN THE HANDS OF THE ASSESSEE FOR A.Y(S). 2007 - 08, 2008 - 09, 2009 - 10 AND 2010 - 11, THEREIN DISALLOWED 1/3 RD OF THE FOREIGN TRAVELLING EXPENSES FOR THE YEAR UNDER CONSIDERATION AND MADE A CONSEQUENTIAL ADDITION OF RS. 30,89,983/ - . THE A.O FURTHER DELIBERATING ON THE MOTOR CAR EXPENSES OF RS. 7,42,710/ - CLAIMED BY THE ASSESSEE , OBSERVED THAT AS NO LOG BOOK/JOURNEY DETAILS WERE MAINTAINED BY HIM , THEREFORE , THE FACT AS TO WHETHER THE CARS WERE EXCLUSIVELY BEING USED BY THE ASSESSEE FOR HIS BUSINESS PURPOSES COULD NOT BE ASCERTAINED. THE A.O ON THE BASIS OF HIS AFORESAID OBSERVATIONS , HOLDING A CONVICTION THAT THE USAGE OF THE CAR S FOR PERSONAL PURPOSES COULD NOT BE RULED OUT, THEREFORE, DISALLOWED 20% OF THE CLAIMED EXPENSES AND MADE AN ADDITION OF RS. 1,48,542/ - IN THE HANDS OF THE ASSESSEE. THAT ON THE BASIS OF HIS AFORESAID OBSERVATIONS THE A.O FURTHER MADE TWO PROPORTIONATE DISALLOWANCES , VIZ. DEPRECIATIO N ON MOTOR CAR OF RS. 2,89,017/ - AND INTEREST ON CAR LOAN OF RS. 92,873/ - . THUS, ON THE BASIS OF THE AFORESAID OBSERVATIONS THE A.O MADE AN AGGREGATE DISALLOWANCE OF RS. 5,30,432/ - PERTAINING TO MOTOR CAR USAGE. THE A.O AFTER DELIBERATING ON CERTAIN OTHER ISSUES ASSESSED THE INCOME OF THE ASSESSEE AT RS. 1,24,80,919/ - . 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A). THE ASSESSEE ASSAILING THE DISALLOWANCE OF RS. 30,89,983/ - MADE BY THE A.O OUT OF THE FOREIGN TRAVELLING EXPENSES, THEREIN S UBMITTED BEFORE THE CIT(A) THAT KEEPING IN VIEW THE VERY FACT THAT HE WAS CARRYING ON THE BUSINESS OF EXPORT OF HIGH END DESIGNER LADIES DRESSES WHICH REQUIRE D HIM TO DISPLAY AND PRESENT THE GARMENTS TO THE FOREIGN BUYERS ABROAD ON A REGULAR BASIS, THEREF ORE , TO FACILITATE INTERACTION WITH FOREIGN BUYERS EXTENSIVE FOREIGN TRAVELLING WAS INVOLVED IN HIS BUSINESS. THE ASSESSEE FURTHER SUBMITTED THAT AS THE FOREIGN TRAVELLING EXPENDITURE WAS INCURRED BY HIM WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF HIS P A G E | 5 ITA NO. 709 /MUM/201 6 AY: 2011 - 12 RISHI KUMAR RAJANI VS. ACIT 16(1) BUSIN ESS, WHICH WAS NEITHER IN THE NATURE OF A CAPITAL EXPENDITURE NOR INVOLVED ANY PERSONAL ELEMENT, THEREFORE, NO PART OF THE FOREIGN TRAVELLING EXPENSES INCURRED BY HIM DURING THE YEAR UNDER CONSIDERATION WAS LIABLE TO BE DISALLOWED. THE ASSESSEE IN ORDER TO DRIVE HOME HIS CONTENTION THAT THE FOREIGN TRAVELLING EXPENSES WERE ALLOWABLE IN HIS HANDS, THEREIN SUBMITTED THAT THE ADDITIONS MADE BY THE A.O UNDER THE HEAD FOREIGN TRAVELLING EXPENDITURE WAS SUBSTANTIALLY SCALED DOWN BY THE CIT(A) WHILE DISPOSING OF H IS APPEALS FOR A.Y(S). 2008 - 09, 2009 - 10 AND 2010 - 11. THE ASSESSEE RELYING ON THE ORDER OF THE CIT(A) PASSED IN HIS CASE FOR A.Y. 2009 - 10, THEREIN AVERRED THAT THE DISALLOWANCE OF 1/3 RD OF THE FOREIGN TRAVELLING EXPENSES WERE RESTRICTED BY THE CIT(A) TO 1/3 RD OF THE EXPENSES WHICH WERE NOT FOUND TO BE VERIFIABLE AND WERE DEBITED BY THE ASSESSEE IN THE SAI D YEAR UNDER THE HEAD OTHERS. THE ASSESSEE THUS SUBMITTED BEFORE THE CIT(A) THAT THE ADDITION /DISALLOWANCE OF THE FOREIGN TRAVELLING EXPENDITURE DURING TH E YEAR U NDER CONSIDERATION ON SIMILAR LINES BE RESTRICTED , KEEPING IN VIEW THE OBSERVATIONS ARRIVED AT BY HIS PREDECESSOR WHILE DISPOSING OFF HIS APPEALS FOR THE PRECEDING YEARS. THE CIT(A) AFTER DELIBERATING ON THE CONTENTION OF THE ASSESSEE OBSERVED THAT THE A.O HAD MADE ADHOC DISALLOWANCE OF FOREIGN TRAVELLING EXPENSES OF RS. 30,89,983/ - FOR THE REASON THAT A DISALLOWANCE TO THE SAID EXTENT WAS MADE IN THE HANDS OF THE ASSESSEE IN THE EARLIER YEARS, VIZ. A.Y(S) 2007 - 08 TO 2010 - 11. THE CIT(A) TOOK COGNIZA NCE OF THE FACT THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD FURNISHED DETAILS OF FOREIGN TRAVELLING EXPENSES INCURRED BY HIM DURING THE YEAR UNDER CONSIDERATION ALONG WITH THE DETAILS OF PLACES VISITED, THE PERIOD OF TRAVEL, NUMBER OF DAYS OF STAY AND FARE AND OTHER EXPENSES INCURRED DURING HIS STAY , AND HAD AVERRED THAT THE EXPENSES FOR THE YEAR UNDER CONSIDERATION DESPITE INCREASE IN THE EXPORT TURNOVER HAD WITNESSED A DECLINE AS IN COMPARISON TO THE P A G E | 6 ITA NO. 709 /MUM/201 6 AY: 2011 - 12 RISHI KUMAR RAJANI VS. ACIT 16(1) IMMEDIATELY PRECEDING YEAR, VIZ. A.Y. 201 0 - 11. THE CIT(A) OBSERVED THAT THE ITAT, D BENCH, MUMBAI, IN THE ASSESSES OWN CASE, VIZ. ITA NO. 4912/MUM/2011, DATED 28.10.2015 HAD CONFIRMED THE ORDERS OF THE CIT(A) FOR THE A.Y(S) 2007 - 08 TO 2009 - 10, AND FOR A.Y. 2006 - 07 RESTRICT ED THE DISALLOWANCE TO 20% OF THE EXPENSES. THE CIT(A) IN THE BACKDROP OF THE AFORESAID FACTS OBSERVED THAT OUT OF THE TOTAL FOREIGN TRAVELLING EXPENSES OF RS. 92,69,950/ - AN AMOUNT OF RS. 7,84, 315/ - AND RS. 21,87,641/ - WAS SPENT BY THE ASSESSEE FOR PURCHASE OF FOREIGN CURRENCY AND RS. 23,18,059/ - WAS INCURRED TOWARDS AIR FARE, VISA CHARGES AND INSURANCE . THE CIT(A) FURTHER OBSERVED THAT THE BALANCE AMOUNT OF RS. 39,79,935/ - WAS SPENT BY THE ASSESSEE FOR HOTEL AND OTHER EXPENSES. THE CIT(A) BEING OF THE VIEW THAT THE EXPENSES BOOKED BY THE ASSESSEE UNDER THE HEAD HOTEL AND OTHER EXPENSES OF RS. 39,79,935/ - WERE NOT FULLY SUPPORTED WITH BILLS AND INVOICES AND CERTAIN EXPENSES, VIZ. SAMPLES, GIFTS AND OTHER SUCH EXPENSES WERE CERTAINLY NOT DIRECTLY RELATED AND INCURRED IN RESPECT OF THE BUSINESS OF THE ASSESSEE. THUS, THE CIT(A) GOING BY THE RATIO ADOPTED BY THE TRIBUNAL IN THE ASSESSES OWN CASE FOR A.Y. 2006 - 07, THEREIN DISALLOWED 20% OF THE HOTEL AND OTHER EXPENSES OF RS. 39,79,935/ - AND RESTRICTED THE ADDI TION/DISALLOWANCE IN THE HANDS OF THE ASSESSEE TO THE EXTENT OF RS. 7,95,987/ - . 5. THAT AS REGARDS THE DISALLOWANCE AGGREGATING TO RS. 5,30,432/ - PERTAINING TO MOTOR CAR USAGE, VIZ. 20% OF MOTOR CAR EXPENSES OF RS. 1,48,542/ - ; PROPORTIONATE DISALLOWANCE O F DEPRECIATION OF RS. 2,89,017/ - ; AND INTEREST ON CAR LOAN OF RS. 92,873/ - , THE CIT(A) OBSERVED THAT AS THE ASSESSEE WAS NOT MAINTAINING ANY LOG BOOK, THEREFORE, THE ELEMENT OF PERSONAL USAGE OF THE MOTOR CARS COULD NOT BE RULED OUT. THE CIT(A) OBSERVED TH AT A DISALLOWANCE TO THE SAID EXTENT MADE BY HIS PREDECESSOR IN THE CASE OF THE ASSESSEE FOR THE EARLIER P A G E | 7 ITA NO. 709 /MUM/201 6 AY: 2011 - 12 RISHI KUMAR RAJANI VS. ACIT 16(1) ASSESSMENT YEARS WAS AFFIRMED BY THE TRIBUNAL, THEREFORE, ON THE SAID COUNT UPHELD THE DISALLOWANCE OF THE AFORESAID EXPENSES MADE BY THE A.O. 6. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAD CARRIED THE MATTER IN APPEAL BEFORE US. THAT DESPITE THE FACT THAT THE ASSESSEE APPELLANT WAS INTIMATED AS REGARDS THE HEARING OF THE APPEAL, HOWEVER, NEITHER ANY APPEARANCE HAD BEEN PUT FORTH BEFO RE US ON HIS BEHALF, NOR ANY APPLICATION SEEKING AN ADJOURNMENT HAD BEEN FILED BEFORE US. WE THUS BEING LEFT WITH NO OTHER ALTERNATIVE PROCEED WITH IN TERMS OF RULE 24 OF THE APPELLATE TRIBUNAL RULES, 1963 AND DISPOSE OF THE APPEAL OF THE ASSESSEE AFTER HE ARING THE RESPONDENT REVENUE AND PERUSING THE ORDER S OF THE LOWER AUTHORITIES. THE LEARNED DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R ) SUBMITTED THAT THE CIT(A) AFTER PERUSING THE FACTS OF THE CASE HAD RIGHTLY UPHELD THE DISALLOWANCE OUT OF THE FOREIGN TRAVELLING EXPENSES AND THE EXPENSES PERTAINING TO MOTOR CAR USAGE. IT WAS AVERRED BY THE LD. D.R. THAT THAT APPEAL OF THE ASSESSEE WAS DEVOID OF ANY MERIT AND WAS THUS LIABLE TO BE DISMISSED. 7. WE HAVE HEARD THE LD. D.R. AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. WE HAVE DELIBERATED ON THE FACTS OF THE CASE AND FIND THAT WHILE FOR THE A.O HAD MADE AN ADHOC DISALLOWANCE OF 1/3 RD OF THE FOREIGN TRAVELLING EXPENSES OF RS. 92,69,950/ - CLAIMED BY THE ASSESSEE, THEREIN LEADING TO A CONSEQUENTIAL ADDITION/DISALLOWANCE OF RS. 30,89,983/ - , HOWEVER, THE CIT(A) AFTER PERUSING THE FACT THAT THE ASSESSEE HAD PLACED ON RECORD DETAILS OF FOREIGN TRAVELLING EXPENSES INCURRED BY HIM DURING THE YEAR UNDER CONSIDERATION ALONG WITH THE DETAILS OF PLACES VISITED, THE PERIOD OF TRAVEL, NUMBER OF DAYS OF STAY AND FARE AND OTHER EXPENSES INCURRED DURING HIS STAY, THEREFORE, P A G E | 8 ITA NO. 709 /MUM/201 6 AY: 2011 - 12 RISHI KUMAR RAJANI VS. ACIT 16(1) KEEPING IN VIEW THE AFORESAID FA CTS AND GOING BY THE RATIO ADOPT ED BY THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR A.Y. 2006 - 07, RESTRICTED THE DISALLOWANCE OF 20% ONLY IN RESPECT OF THE EXPENSES WHICH WERE BOOKED UNDER THE HEAD HOTEL AND OTHER EXPENSES, FOR THE REASON THAT THE SAME WE RE NOT BACKED BY SUPPORTING BILLS AND INVOICES. WE FIND THAT THE ASSESSEE HAD ASSAILED THE ORDER OF THE CIT(A) FOR THE REASON THAT WHILE FOR THE FACTS INVOLVED IN THE CASE OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2011 - 12 WERE DISTINGUISH ABLE AS I N COMPARISON TO THOSE INVOLVED IN A.Y. 2006 - 07 WHICH HAD BEEN RELIED UPON BY THE CIT(A), WHEREAS THE FACTS INVOLVED IN THE CASE OF THE ASSESSEE FOR A.Y(S) 2007 - 08 TO 2009 - 10 WERE IN PARITY WITH THOSE FOR THE YEAR UNDER CONSIDERATION. WE FIND THAT THE ASSESSEE IN THE BACKDROP OF HIS AFORESAID GROUND HAD AVERRED THAT AS THE TRIBUNAL WHILE DISPOSING OF THE APPEALS OF THE ASSESSEE FOR A.Y(S) 2007 - 08 TO 2009 - 10 HAD UPHELD THE ORDER OF THE CIT(A) AND CONFIRMED THE DISALLOWANCE OUT OF FOREIGN TRAVELLING E XPENSES ONLY TO EXTENT OF 10% OF OTHER EXPENSES OUT OF THE ENTI RE FOREIGN TRAVELLING EXPENSES, THEREFORE, ON A SIMILAR FOOTING THE A.O BE DIRECTED TO RESTRICT THE DISALLOWANCE OUT OF FOREIGN TRAVELLING EXPENSES TO THE EXTENT OF 10% OF OTHER EXPENSES. WE HAVE DELIBERATED ON THE AFORESAID CLAIM OF THE ASSESSEE THAT IN THE BACKDROP OF THE OBSERVATIONS OF TRIBUNAL IN THE ASSESSES OWN CASE FOR A.Y(S). 2007 - 08 TO 2009 - 10, THE DISALLOWANCE OUT OF FOREIGN TRAVELLING EXPENSES FOR THE YEAR UNDER CONSIDERATION MA Y ALSO BE RESTRICTED TO 10% OF OTHER EXPENSES . WE ARE OF THE CONSIDERED VIEW THAT IN THE BACKDROP OF THE VERY FACT THAT THE DISALLOWANCE OUT OF FOREIGN TRAVELLING EXPENSES IN THE PRECEDING YEARS, AYS 2007 - 08 TO 2009 - 10 , AS CLAIMED BY THE ASSESSEE , WAS R ESTRICTED BY THE CIT(A) TO 10% OF THE OTHER EXPENSES, WHICH ORDER OF THE CIT(A) HAD THEREAFTER BEEN AFFIRMED BY THE TRIBUNAL, THEREFORE, GOING BY THE RULE OF CONSISTENCY IN ALL FAIRNESS RESTRICT THE DISALLOWANCE OF THE FOREIGN P A G E | 9 ITA NO. 709 /MUM/201 6 AY: 2011 - 12 RISHI KUMAR RAJANI VS. ACIT 16(1) EXPENSES FOR THE YEAR UNDE R CONSIDERATION ON THE SAME FOOTING TO 10% OF THE OTHER EXPENSES FOR THE YEAR UNDER CONSIDERATION. THE GROUND OF APPEAL NO. 1 IS ALLOWED. 8. THAT AS REGARDS THE DISALLOWANCE OF RS. 5,30,432/ - MADE BY THE A.O IN RESPECT OF THE MOTOR CAR EXPENSES, WHICH THEREAFTER HAD BEEN AFFIRMED BY THE CIT(A), WE FIND THAT THE ASSESSEE HAD CLAIMED IN THE GROUND OF APPEAL NO. 2 RAISED BEFORE US THAT AS THE ENTI RE MOTOR CAR EXPENSES HAD BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE, THEREFORE, NO DISALLOWANCE OF THE SAME WAS CALLED FOR IN THE HANDS OF THE ASSESSEE. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE AFORESAID C ONTENTION OF THE ASSESSEE AND ARE UNABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE SAME. WE FIND FROM THE RECORDS THAT THE ASSESSEE HAD NOT MAINTAINED ANY LOG BOOK IN RESPECT OF THE MOTOR CARS, AS A RESULT WHEREOF THE LOWER AUTHORITIES HAD RIGHTLY CONCLUDE D THAT THE ELEMENT OF PERSONAL USAGE OF THE MOTOR CAR S CANNOT BE RULED OUT. WE FIND THAT THE CIT(A) AFTER RECORDING THE AFORESAID OBSERVATIONS HAD RELIED ON THE ORDER PASSED BY HIS PREDECESSOR IN THE ASSESSES OWN CASE FOR THE EARLIER ASSESSMENT YEARS, WHER EIN UNDER SIMILAR FACTS A DISALLOWANCE TO THE SAID EXTENT WAS MADE IN THE HANDS OF THE ASSESSEE. WE FURTHER FIND THAT AS OBSERVED BY THE CIT(A) , THE ORDERS OF HIS PREDECESSOR FOR THE EARLIER ASSESSMENT YEARS HAD BEEN UPHELD IN RESPECT OF THE ISSUE UNDER CO NSIDERATION BY THE TRIBUNAL. WE ARE OF THE CONSIDERED VIEW THAT AS NEITHER ANY MATERIAL HAD BEEN BROUGHT TO OUR NOTICE WHICH WOULD PERSUADE US TO OBSERVE THAT THE OBSERVATIONS OF THE CIT(A) ARE PERVERSE OR INCORRECT, THEREFORE , FIND NO REASON TO DISLODGE T HE SAME. WE THUS IN THE TERMS OF OUR AFORESAID OBSERVATIONS UPHOLD THE SUSTAINING OF THE DISALLOWANCE OF EXPENSES PERTAINING TO MOTOR CAR USAGE OF RS. P A G E | 10 ITA NO. 709 /MUM/201 6 AY: 2011 - 12 RISHI KUMAR RAJANI VS. ACIT 16(1) 5,30,432/ - BY THE CIT(A). THE GROUND OF APPEAL NO. 2 RAISED BY THE ASSESSEE IS DISMISSED. 9 . THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED I N THE OPEN COURT ON 20. 1 2. 2017 SD/ - SD/ - ( P.K. BANSAL ) ( RAVISH SOOD ) VICE PRESIDENT JUDICIAL MEMBER MUMBAI ; 20 .1 2 .2017 PS. ROHIT KUMAR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI P A G E | 11 ITA NO. 709 /MUM/201 6 AY: 2011 - 12 RISHI KUMAR RAJANI VS. ACIT 16(1)