MURUGAN TOURS & TRAVELS P. LTD., MUMBAI V. I.T.O. WD-2(2)-3, MUMBAI

ITA 7283/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1724 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 14-03-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 31-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business expenditure

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , . !'#$ , % & BEFORE SHRI I.P. BANSAL, JM AND SHRI N.K. BILLA IYA, AM ./ I.T.A. NO. 7283/MUM/2011 ( ' ' ' ' / ASSESSMENT YEAR : 2008-2009 MURUGAN TOURS & TRAVEL P. LTD., FLAT NO.11, BLDG.2, GOLDEN VALLEY, KALINA, SANTACRUZ(EAST) MUMBAI - 400 098. / VS. THE ITO, WARD-2(2), MUMBAI. ( % ./ )* ./ PAN/GIR NO. : AAACM 2854R ( (+ / APPELLANT ) .. ( ,-(+ / RESPONDENT ) (+ . / APPELLANT BY: SHRI VIPUL JOSHI ,-(+ / . / RESPONDENT BY : SHRI. MOHIT JAIN / 0% / DATE OF HEARING : 14/03/2013 12' / 0% / DATE OF PRONOUNCEMENT : 14/03/2013 3 / O R D E R PER I.P.BANSAL:J.M: THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS D IRECTED AGAINST THE ORDER PASSED BY LD. CIT(A)-5, MUMBAI DATED 10/08/2011 FOR ASSESSMENT YEAR 2008-09. THE GROUNDS OF APPEAL RAISED BY THE ASSES SEE READ AS UNDER: 1.1 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S)- 5, MUMBAI, [THE LD. CIT (A)] ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER (THE A.O.) IN DISALLOWING THE D EDUCTION OF RS. 1,43,572/-, CLAIMED ON ACCOUNT OF COMMISSION PAID T O VARIOUS CUSTOMER AS DISCOUNT FOR PURCHASE OF DOMESTIC AND I NTERNATIONAL TICKETS FROM THE APPELLANT. ./ I.T.A. NO. 7283/MUM/2011 2 1.2 WHILE DOING SO, THE ID. CIT (A) FAILED TO APPRE CIATE THAT: - (A) THE COMMISSION PAID CONSTITUTED BONA FIDE AND G ENUINE BUSINESS EXPENDITURE OF THE APPELLANT; AND (B) THE COMMISSION WAS PAID IN THE NORMAL AND REGUL AR COURSE OF BUSINESS OF THE APPELLANT AND, AS SUCH, THE SAME WA S ALLOWABLE AS BUSINESS EXPENDITURE. 1.3 IT IS SUBMITTED THAT IN THE FACTS AND CIRCUMSTA NCES OF THE CASE, AND IN LAW, NO SUCH DISALLOWANCE WAS CALLED FOR. 1.4 APPELLANT PRAYS THAT THE DISALLOWANCE OF RS. 1, 43,572/- BE DELETED. 2. THE ASSESSEE IS WORKING AS SUB-AGENT FOR BOOKING OF AIRLINE TICKETS. IT WAS FOUND BY THE A.O THAT ON INTERNATIONAL TICKETS COMMISSION EARNED BY THE ASSESSEE WAS A SUM OF RS.4,51,893/- OUT OF WHIC H THE ASSESSEE CLAIMED THAT IT HAD PAID DISCOUNT OF RS.3,69,519/- AND NET COMMISSION INCOME WAS SHOWN FROM INTERNATIONAL TICKETS AT RS.82,374/-. T HE DISCOUNT GIVEN BY THE ASSESSEE WAS FOUND TO BE TO THE EXTENT OF82% OF TH E GROSS COMMISSION. ACCORDING TO AO, THAT WAS ON VERY HIGHER SIDE. T HE A.O ASKED THE ASSESSEE TO PRODUCE VOUCHERS. VOUCHERS WERE PRODUCED BEFORE AO. HOWEVER, THE COPY OF VOUCHERS PRODUCED BEFORE AO WAS THIRD COPY. IT WAS STATED THAT ASSESSEE HAD ISSUED ORIGINAL COPY TO THE CUSTOMER A ND SECOND COPY WAS UTILIZED FOR COLLECTING THE AMOUNT FROM THE CUSTOM ER AND THIRD COPY WAS MAINTAINED. ACCORDING TO AO SECOND COPY WAS CRUCIA L TO ESTABLISH THE GENUINENESS OF THE CLAIM OF THE ASSESSEE. IN ABSEN CE OF SECOND COPY WHICH WAS NOT PRODUCED ON THE GROUND THAT COMPANY HAS CL OSED ITS OPERATION W.E.F. MARCH, 2010 AND HAS DESTROYED THE SECOND COP Y, THE AO CAME TO THE CONCLUSION THAT THE DISCOUNT GIVEN BEING ON HIGHER SIDE AND ASSESSEE REMAIN UNABLE TO PRODUCE SECOND COPY OF VOUCHERS, THE DIS COUNT WAS TO BE DISALLOWED @50%. IN THIS MANNER A SUM OF RS.1,43,5 72/- WAS DISALLOWED AND REDUCED FROM THE RETURNED LOSS OF RS. 1,71,377 /- RESULTING INTO NET ASSESSABLE NEGATIVE INCOME OF RS.27,807/-. THE DI SALLOWANCE HAS BEEN SUSTAINED BY LD. CIT(A). THE ASSESSEE IS AGGRIEVED, HENCE HAS FILED AFOREMENTIONED APPEAL. ./ I.T.A. NO. 7283/MUM/2011 3 3. INITIALLY, LD. A.R OF THE ASSESSEE HAS FILED BEF ORE US APPLICATION FOR ADJOURNMENT STATING THAT SOME TIME IS REQUIRED TO FILE NECESSARY DETAILS, DOCUMENTS AND A PAPER BOOK IS REQUIRED TO BE FILED. HOWEVER, ON NOTING THE FACT THAT EARLIER ALSO THIS APPEAL WAS ADJOURNED O N 8/10/2012 AND APPEAL IS VERY SMALL, THE REQUEST REGARDING GRANT OF ADJOU RNMENT WAS NOT APPROPRIATE. THEREFORE, WE PROCEED TO DECIDE THIS APPEAL. IT WAS SUBMITTED BY LD. AR THAT THIRD COPY HAVE NOT BEEN PRODUCED B EFORE AO, THERE WAS NO NECESSITY OF PRODUCING THE SECOND COPY AND AO HAS M ADE ADDITION JUST FOR THE PURPOSE OF MAKING ADDITION AND LD. CIT(A) ALSO HAS SUSTAINED THE ADDITION WITHOUT PROPER APPLICATION OF MIND ON THE FACTS. HE, THEREFORE, SUBMITTED THAT THE ADDITION SHOULD BE DELETED. IN THE ALTERNATIVE, HE SUBMITTED THAT AS THE ASSESSEE WANTS TIME TO FILE C ERTAIN DOCUMENTS AND THAT TIME IS NOT GIVEN TO THE ASSESSEE, THE MATTER MAY BE RESTORED BACK TO THE FILE OF AO FOR RE-ADJUDICATION OF THIS ISSUE AF TER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF HEARING IN THIS REGARD. 4. ON THE OTHER HAND, LD. D.R RELIED UPON THE ASSES SMENT ORDER AS WELL AS ORDER PASSED BY LD. CIT(A). 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS IN THE LIGHT OF MATERIAL PLACED BEFORE US. THE AO BEING ADJUDICAT ING AUTHORITY IS ENTITLED TO DETERMINE THAT WHAT EVIDENCE WILL BE APPROPRIAT E TO EXAMINE AN ISSUE. APPARENTLY, THE ASSESSEE DID NOT PRODUCE SECOND COP Y OF THE BILLS ISSUED TO THE CUSTOMERS. HOWEVER, EVEN FROM THE THIRD COPY HE COULD ASCERTAIN THAT WHETHER OR NOT DISCOUNT CLAIMED BY THE ASSESSEE WA S AN APPROPRIATE AMOUNT. FOR THIS PURPOSE HE COULD SEE THE PAST REC ORD OF THE ASSESSEE AND DETERMINE THAT WHAT PERCENTAGE OF DISCOUNT HAS BEE N GIVEN BY THE ASSESSEE IN THE EARLIER YEARS. THE AO ALSO COULD TAKE OTHER ASPECTS OF THE MATTER INTO CONSIDERATION. THE AO HAS ALSO NOT DESCRIBED AS TO HOW ESTIMATE MADE BY HIM FOR 50% AS DISCOUNT IS APPROPRIATE. LD. AR ALSO SUBMITTED THAT CERTAIN DOCUMENTS ARE AVAILABLE WITH THE ASSESSEE W HICH ARE REQUIRED TO BE FILED. KEEPING IN VIEW ALL THESE FACTS IN MIND AND ALSO THE INTEREST OF JUSTICE, WE ARE OF THE OPINION THAT IT WILL BE APPROPRIATE T O RESTORE THIS ISSUE TO THE ./ I.T.A. NO. 7283/MUM/2011 4 FILE OF AO FOR RE-ADJUDICATION OF THE SAME AS PER L AW. AO WILL RE-ADJUDICATE THIS ISSUE AFTER GIVING THE ASSESSEE A REASONABLE O PPORTUNITY FOR SUBMITTING EXPLANATION AND FURNISHING EVIDENCE, IF ANY, AVAILA BLE WITH THE ASSESSEE. WITH THESE REMARKS WE RESTORE THIS ISSUE TO THE F ILE OF AO FOR FRESH ADJUDICATION. 6. APPEAL FILED BY THE ASSESSEE IS CONSIDERED TO BE ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH DAY OF MARCH,2013. . 3 / 2' % 4 56 14/03/2013 2 / 7 SD/- SD/- (N.K. BILLAIYA) (I.P. BANSAL) ( !'#$ ) ( . . ) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; 5 DATED 14/03/2013 . . ./ VM , SR. PS 3 3 3 3 / // / ,09: ,09: ,09: ,09: ;:'0 ;:'0 ;:'0 ;:'0 / COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. < ( ) / THE CIT(A)- 4. < / CIT 5. :=7 ,0 , , / DR, ITAT, MUMBAI 6. 7> ? / GUARD FILE. 3 3 3 3 / BY ORDER, -:0 ,0 //TRUE COPY// @ @@ @ / A A A A ) ) ) ) (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI