K'S JEWELLERY & CO, MUMBAI V. ACIT 20(1), MUMBAI

ITA 7495/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92778 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 20-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN
• Assessee Lawyers: DEEPAK K PAREKH
• Section: 37; 37(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER . / ITA NO.7495/MUM/2013 / ASSESSMENT YEAR 2009-10 K.S. JEWELLERY & CO., 221-A, ADARSH INDL. ESTATE, SAHAR ROAD, CHAKALA, ANDHERI(E), MUMBAI 400 099 / VS. ASSTT. COMM. OF INCOME TAX 20(1), PIRAMAL CHAMBERS, LALBAUG, MUMBAI 400012. ./ ./ PAN/GIR NO. : AADFK 2394Q ( / APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY SHRI DEEPAK K. PAREKH RESPONDENT BY SHRI ASGHAR ZAIN ! ' / DATE OF HEARING : 03/06/2015 ! ' / DATE OF PRONOUNCEMENT : 03/06/2015 / O R D E R PER I.P.BANSAL, J.M: THIS IS AN APPEAL FILED BY THE ASSESSEE AND IT IS DIRECTED AGAINST ORDER PASSED BY LD. CIT(A)-31 MUMBAI DATED 21/11/2013 FOR ASSESSMENT YEAR 2009- 10. GROUNDS OF APPEAL READ AS UNDER: ON THE FACTS, CIRCUMSTANCES AND LEGALITY OF THE CA SE, HONBLE CIT (APPEALS) -31 ERRED IN CONFIRMING THE DISALLOWANCE OF TRAVELLING EXPENDITURE OF RS.6,60,131/- MADE BY THE ASSESSING OFFICER. 2. AT THE OUTSET, IT WAS SUBMITTED BY LD. AR THAT T HE FOREIGN TRAVELS EXPENSES WHICH ARE SUBJECT TO DISALLOWANCES WERE AL SO SUBJECTED TO TAX IN FBT RETURN. TO SUPPORT SUCH CONTENTION LD. AR HAS SUBM ITTED DETAILS OF FBT PAID . / ITA NO.7495/MUM/2013 / ASSESSMENT YEAR 2009-10 2 ON FT EXPENSES, COPY OF WHICH WAS ALSO GIVEN TO LD. DR. ON THESE FACTS IT WAS SUBMITTED THAT SINCE FOREIGN TRAVEL EXPENSES HAVE ALREADY BEEN SUBJECTED TO FBT, THE SAME COULD NOT BE DISALLOWED UNDER SECTION 37 OF THE INCOME TAX ACT, 1961 (THE ACT). TO SUPPORT SUCH CONTENTION, RELIAN CE WAS PLACED ON THE DECISION OF TRIBUNAL DATED 25/4/2013 IN THE CASE OF OM INTERCONTINENTAL VS. ACIT IN ITA NO.2310/MUM/2012 & 2311/MUM/2012, IN W HICH SIMILAR PROPOSITION WAS ACCEPTED AND REFERENCE WAS MADE TO THE FOLLOWING OBSERVATIONS OF THE TRIBUNAL. 5. AT THE OUTSET, IT IS THE SUBMISSION OF LD. A.R T HAT BOTH THE EXPENSES I.E. EXPENSES ON TRAVELING AND TELEPHONE ETC. WERE SUBJE CTED TO FBT PROVISIONS. HE SUBMITTED THAT THOUGH LD. CIT(A) HAS NOT ACCEPTED S UCH PROPOSITION OF THE ASSESSEE BUT MUMBAI TRIBUNAL IN THE CASE OF HANSR AJ MATHURADAS V. ITO VIDE DECISION DATED 16/09/2011 IN ITA NO.2379/MUM/2010 H AS HELD THAT WHERE THE EXPENDITURE WHICH ARE SUBJECTED TO FBT CANNOT BE D ISALLOWED UNDER SECTION 37(1) OF THE INCOME TAX ACT, 1961(THE ACT) ON THE G ROUND THAT THESE ARE NOT FOR THE PURPOSE OF BUSINESS. 6. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER PASSED BY LD. CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. IN THE AFOREMENTIONED DECISION IN THE CASE OF HANSRAJ MATHURADAS(SUPRA), RELYING UPON CBDT CIRCULAR NO.8 /2005 DATED 29/8/2005 IT WAS HELD THAT ONCE FBT IS LEVIED ON EXPENSES INCUR RED, IT FOLLOWS THAT THE SAME ARE TREATED AS FRINGE BENEFIT PROVIDED BY THE ASSES SEE AS EMPLOYER TO ITS EMPLOYEES AND THE SAME HAVE TO BE APPROPRIATELY ALL OWED AS EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY BY THE ASSESSEE FOR THE PURPOSE OF ITS BUSINESS. NO CONTRARY DECISION HAS BEEN BROUGHT TO OUR NOTICE IN THIS REGARD. THEREFORE, RESPECTFULLY FOLLOWING THE AFOREMENTIONED DECISION WE HOLD THAT IF THE AFOREMENTIONED EXPENDITURE WERE SUBJECTED TO FBT, T HEN DISALLOWANCE CANNOT BE MADE. HOWEVER, TO VERIFY THAT WHETHER OR NOT THESE EXPENDITURE WERE SUBJECTED TO FBT, WE RESTORE THE ISSUES RAISED IN THESE APPEA LS TO THE FILE OF AO WITH A DIRECTION TO VERIFY THE CONTENTION OF THE ASSESSEE THAT WHETHER OR NOT IMPUGNED EXPENDITURE WERE SUBJECTED TO FBT. IF THOSE EXP ENDITURE WERE SUBJECTED TO FBT THEN NO DISALLOWANCE CAN BE MADE AND THE CLAIM OF T HE ASSESSEE SHOULD BE ACCEPTED IN ITS ENTIRETY. WE DIRECT ACCORDINGLY. 8. IN THE RESULT, FOR STATISTICAL PURPOSES THESE AP PEALS FILED BY THE ASSESSEE ARE TREATED AS ALLOWED IN THE MANNER AFORESAID. COPY OF ORDER WAS PLACED ON OUR RECORD AND WAS A LSO GIVEN TO LD. DR. . / ITA NO.7495/MUM/2013 / ASSESSMENT YEAR 2009-10 3 3. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER PASSED BY LD. CIT(A). 4. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. THE ASSESSEE HAS SUBMITTED THE DETAILS , ACCORDING TO WHICH FOREIGN TRAVEL EXPENSES WERE SUBJECTED TO FBT. THEREFORE, FOLLOWING THE AFOREMENTIONED DECISION, RELEVANT OBSERVATIONS OF WHICH HAVE ALREADY BEEN REPRODUCED, WE DELETE THE ADDITION AND APPEAL FILED BY THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03/06/2015 () * + 03/06/2015 SD/- SD/- ( , / RAJENDRA) ( . . / I.P. BANSAL) / ACCOUNTANT MEMBER / JUDICIAL MEMBER ( MUMBAI; * DATED 03/06/2015 ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. .! ( ) / THE CIT(A)- 4. .! / CIT 5. /0 !12 , ' 12 , ( / DR, ITAT, MUMBAI 6. 3 / GUARD FILE. / BY ORDER, /! ! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ( / ITAT, MUMBAI . . ./ VM , SR. PS