METTLER-TOLEDO INDIA PVT. LTD, MUMBAI V. DCIT CIRCLE 10(2)(2), MUMBAI

ITA 7110/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4377 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 10-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JYOTHILAKSHMI NAYAK
• Assessee Lawyers: AJAY R SINGH
• Keywords: Corroborative evidences
• Section: 64

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHR I G. MANJUNATH A , ACCOUNTANT MEMBER ITA NO. 7110 / MUM . /201 8 ( ASSESSMENT YEAR : 20 10 11 ) METTLER TOLEDO INDIA PVT. LTD. 1, AMAR HILL, SAKI VIHAR ROAD POWAI, MUMBAI 400 072 PAN AABCM0779N . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CIRCLE 10(2)(2), MUMBAI . RESPONDENT ASSESSEE BY : SHRI AJAY R. SINGH REVENUE BY : S HRI JYOTHILAKSHMI NAYAK DATE OF HEARING 21 .01.2020 DATE OF ORDER 26.02.2020 O R D E R PER SAKTIJIT DEY. J.M. THE CAPTIONED APPEAL HAS BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 17 TH SEPTEMBER 2018, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 51, MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2010 11. 2. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO THE DISALLOWANCE OF AN AMOUNT OF ` 39,79,656, REPRESENTING TRAVELLING EXPENDITURE. 2 METTLER TOLEDO INDIA PVT. LTD. 3. B RIEF FACTS ARE, THE ASSESSEE , A RESIDENT COMPANY , IS EN GAGED IN THE BUSINESS OF MANUFACTURING AND DEALING IN WEIGHING AND ANALYTICAL SCALES AND SOFTWARE DEVELOPMENT. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 30 TH SEPTEMBER 2010, DECLARING TOTAL INCOME OF ` 14,31,12,688. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE AMOUNT OF ` 3,67,96,563, HAS BEEN DEBITED TO THE PROFIT & LOSS ACCOUNT TOWARDS OPERATING AND ADMINISTRATIVE EXPENDITURE. AFTER CALLING UPON THE ASSESSEE TO FURNI SH THE DETAILS AND VERIFYING THEM, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS NOT FURNISHED THE DETAILS OF TRAVELLING EXPENSES IN THE FORMAT PROVIDED BY HIM. THUS, STATING THAT SUPPORTING EVIDENCE WAS NOT FURNISHED BY THE ASSESSEE TO JUSTIFY THE CLAIM, THE ASSESSING OFFICER DISALLOWED 10% WORKING OUT TO ` 36,79,656, OUT OF THE EXPENDITURE CLAIMED AND ADDED BACK TO THE INCOME OF THE ASSESSEE. 4. THOUGH, THE ASSESSEE CHALLENGED THE AFORESAID DISALLOWANCE BEFORE THE FIRST A PPELLATE AUTHORITY, HOWEVER, LEARNED COMMISSIONER (APPEALS) ALSO SUSTAINED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 5. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THE DISALLOWANCE HAS BEEN MADE BY THE ASSESSING OFFICER PURELY ON GUESS WORK AND ONLY FOR THE REASON THAT DETAI LS WERE NOT FURNISHED IN THE 3 METTLER TOLEDO INDIA PVT. LTD. FORMAT PROVIDED BY THE ASSESSING OFFICER. HE SUBMITTED , THE TRAVELLING EXPENSE WAS INCURRED BY THE EMPLOYEES SPREAD OVER THE COUNTRY AND NUMBERING TO 444. HE SUBMITTED , IN CASE OF 325 EMPLOYEES / PARTIES , THE ASSESSEE HAS FURNI SHED PAN DETAILS AND ADDRESS REPRESENTING THE AMOUNT OF ` 3,30,26,231. IN RESPECT OF 106 EMPLOYEES / PARTIES REPRESENTING AMOUNT OF ` 26,48,483, THE ASSESSEE HAS FURNISHED ADDRESS AND IN RESPECT OF 64 EMPLOYEES / PARTIES REPRESENTING AN AMOUNT OF ` 6,46,41 9, NEITHER PAN DETAILS NOR ADDRESS IS AVAILABLE. THUS, HE SUBMITTED , AT LEAST IN RESPECT OF PARTIES WHOSE PAN DETAILS AND ADDRESS IS AVAILABLE , NO DISALLOWANCE CAN BE MADE. HE SUBMITTED , FOR THE BALANCE AMOUNT S OF ` 26,48,483, AND ` 6,46,419, IN RESPECT OF WHICH EITHER PAN DETAILS AND ADDRESS OR BOTH ARE NOT AVAILABLE , THE DISALLOWANCE CAN BE RESTRICTED TO 10% OF THE AMOUNT CLAIMED. FURTHER, HE SUBMITTED , THOUGH , THE ASSESSEE HAD CLAIMED SIMILAR EXPENDITURE IN EARLIER AS WELL AS SUBSEQUENT ASSESSMENT YEAR S , NO SUCH DISALLOWANCE HAS EVER BEEN MADE. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED , BEFORE THE DEPARTMENTAL AUTHORITIES, THE ASSESSEE DID NOT FURNISH PAN DETAILS AND ADDRESS OF THE PERSONS FOR WHOM TRAVELLING EXPENSES WAS INCURRED. SHE SUBMITTED , SINCE NOW THE ASSESSEE HAS FURNISHED FURTHER D ETAILS REGARDING THE PAN AND ADDRESS, THE ISSUE MAY BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER. 4 METTLER TOLEDO INDIA PVT. LTD. 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. AS COULD BE SEEN, THE ASSESS EE HAS OFFERED SUBSTANTIAL AMOUNT OF INCOME TO THE TUNE OF ` 14,31,12,688. THUS, FROM THE AFORESAID FACTS, IT BECOMES CLEAR THAT ASSESSEES TURNOVER IS RUNNING INTO CRORE. COMPARED TO THAT, THE EXPENDITURE CLAIMED BY THE ASSESSEE TOWARDS TRAVELLING AMOUNTI NG TO ` 3,67,96,562, APPEARS TO BE REASONABLE. BE THAT AS IT MAY, THE PRIMARY GROUND ON WHICH THE ASSESSING OFFICER DISALLOWED A PART OF THE EXPENDITURE , THAT TOO , PURELY ON AD HOC BASIS IS DUE TO NON AVAILABILITY OF PAN DETAILS AND ADDRESS OF EMPLOYEES / PARTIES IN RESPECT OF WHOM SUCH EXPENDITURE HAS BEEN INCURRED. HOWEVER, BEFORE US, THE ASSESSEE HAS FURNISHED BOTH PAN DETAILS AND ADDRESS OF 325 EMPLOYEES / PARTIES REPRESENTING THE AMOUNT OF ` 3,30,26 ,231. THEREFORE, TO THAT EXTENT THE DOUBT, IF ANY, HAR BOURED BY THE ASSESSING OFFICER STANDS REMOVED. HOWEVER, SINCE THE AFORESAID INFORMATION WAS NOT FURNISHED BEFORE THE DEPARTMENTAL AUTHORITIES, AS ALLEGED BY THE REVENUE , WE DIRECT THE ASSESSING OFFICER TO VERIFY THE INFORMATION FURNISHED BY THE ASSESSEE A ND ALLOW THE EXPENDITURE OF ` 3,30,26,231. AS REGARDS THE BALANCE AMOUNT OF ` 32,94,902, THE LEARNED AUTHORISED REPRESENTATIVE HAS SUBMITTED BEFORE US THAT IN SOME CASES , THOUGH , ADDRESS IS AVAILABLE, BUT PAN DETAILS ARE NOT AVAILABLE, BUT IN SOME CASES, P AN DETAILS AND ADDRESS BOTH ARE NOT AVAILABLE. THEREFORE, HE HAS SUBMITTED BEFORE US TO 5 METTLER TOLEDO INDIA PVT. LTD. RESTRICT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ONLY TO THOSE CASES. CONSIDERING THE ABOVE, WE DIRECT THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE TO 10% OF THE AMOUNT OF ` 32,94,902. GROUNDS ARE PARTLY ALLOWED. 8. IN THE RESULT, APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN C OURT ON 26.02.2020 SD/ - G. MANJUNATH ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 26.02.2020 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI