M/s. BEC Industries, New Delhi V. JCIT, New Delhi

ITA 754/DEL/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4737 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 07-08-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 06-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BHIM SINGH
• Assessee Lawyers: SHAILENDRA BAJAJ
• Keywords: Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH A AA A : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI A.D.JAIN A.D.JAIN A.D.JAIN A.D.JAIN, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.754/DEL/2013 754/DEL/2013 754/DEL/2013 754/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2009 2009 2009 2009- -- -10 1010 10 M/S BEC INDUSTRIES, M/S BEC INDUSTRIES, M/S BEC INDUSTRIES, M/S BEC INDUSTRIES, C CC C- -- -108, MAYAPURI, 108, MAYAPURI, 108, MAYAPURI, 108, MAYAPURI, INDUSTRIAL AREA, PHASE INDUSTRIAL AREA, PHASE INDUSTRIAL AREA, PHASE INDUSTRIAL AREA, PHASE- -- -I II II, I,I, I, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 064. 110 064. 110 064. 110 064. PAN : PAN : PAN : PAN : AAAFB4450B. AAAFB4450B. AAAFB4450B. AAAFB4450B. VS. VS. VS. VS. JOINT COMMISSIONER OF INCOME TAX, JOINT COMMISSIONER OF INCOME TAX, JOINT COMMISSIONER OF INCOME TAX, JOINT COMMISSIONER OF INCOME TAX, RANGE RANGE RANGE RANGE- -- -39, 39, 39, 39, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SHAILENDRA BAJAJ, AR. RESPONDENT BY : SHRI BHIM SINGH, SR.DR. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, V VV VP PP P : : : : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XXVIII, NEW DELHI DATED 3 RD DECEMBER, 2012 FOR THE AY 2009-10. 2. GROUND NO.1 OF THE ASSESSEES APPEAL READS AS UNDER:- 1.A. THAT THE LD.CIT(A) ERRED BOTH IN FACTS AND IN LAW WHILE SUSTAINING THE ADDITION OF 50% OF RS.1,13,098/- RELATI NG ADHOC DISALLOWANCE OF 10% OUT OF TRAVELING, SALES PROMOTION, CONVEYANCE, PETROL ON CAR AND SCOOTER AND TELEPHONE EXPENSES MADE BY THE ASSESSING OFFICER. ITA-754/DEL/2013 2 3. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERI AL PLACED BEFORE US. THE ASSESSING OFFICER DISALLOWED 10% OUT OF TRAVELING, SALES PROMOTION, CONVEYANCE, PETROL FOR CAR AND SCOOTER AN D TELEPHONE EXPENSES. LEARNED CIT(A) REDUCED THE DISALLOWANCE TO 5%. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDES AND THE FAC TS OF THE CASE, WE ARE OF THE OPINION THAT THERE IS NO JUSTIFICATION FOR DISALLOWANCE OUT OF SALES PROMOTION EXPENSES ON THE GROUND THAT IT IS IN THE NATURE OF PERSONAL EXPENSES OF THE PARTNERS OF THE ASSESSEE FIRM. TH EREFORE, WE DIRECT THE ASSESSING OFFICER TO DELETE THE DISALLOWANCE OUT OF SALES PROMOTION EXPENSES. HOWEVER, THE REMAINING DISALLOWA NCE I.E. DISALLOWANCE OUT OF TRAVELING, CONVEYANCE, PETROL AN D TELEPHONE EXPENSES IS SUSTAINED. THE ASSESSING OFFICER WILL WORK OUT THE DISALLOWANCE ACCORDINGLY. 4. GROUND NO.2 OF THE ASSESSEES APPEAL READS AS UNDER:- 1.B THAT THE LD.CIT(A) ERRED BOTH IN FACTS AND IN L AW WHILE SUSTAINING THE ENTIRE DISALLOWANCE OF DIWALI EXPENSES OF RS.1,00,053 MADE BY THE ASSESSING OFFICER. 5. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERI AL PLACED BEFORE US. THE ASSESSING OFFICER HAS DISALLOWED THE ENTIR E DIWALI EXPENSES CLAIMED BY THE ASSESSEE ON THE GROUND THAT IT W AS NOT INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BU SINESS. IT WAS EXPLAINED BY THE LEARNED COUNSEL THAT THE ASSESSEE HAS A LARGE NUMBER OF EMPLOYEES AND THE EXPENSES INCLUDE THE EXPENSES ON SWE ETS GIVEN TO THE EMPLOYEES AND OTHER GIFTS GIVEN TO EMPLOYEES ET C. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDES AND THE FAC TS OF THE CASE, IN OUR OPINION, IT WOULD MEET THE ENDS OF JUSTICE IF 25% OUT OF DIWALI ITA-754/DEL/2013 3 EXPENSES IS DISALLOWED. WE ORDER ACCORDINGLY AND DIREC T THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE AT 25% OF THE DI WALI EXPENSES CLAIMED BY THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY AL LOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 27 TH AUGUST, 2013. SD/- SD/- ( (( (A.D.JAIN A.D.JAIN A.D.JAIN A.D.JAIN) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 27.08.2013 VK. COPY FORWARDED TO: - 1. APPELLANT : M/S BEC INDUSTRIES, M/S BEC INDUSTRIES, M/S BEC INDUSTRIES, M/S BEC INDUSTRIES, C CC C- -- -108, MAYAPURI, 108, MAYAPURI, 108, MAYAPURI, 108, MAYAPURI, INDUSTRIAL AREA, PHASE INDUSTRIAL AREA, PHASE INDUSTRIAL AREA, PHASE INDUSTRIAL AREA, PHASE- -- -II, NEW DELHI II, NEW DELHI II, NEW DELHI II, NEW DELHI 110 064. 110 064. 110 064. 110 064. 2. RESPONDENT : JOINT COMMISSIONER OF INCOME TAX, JOINT COMMISSIONER OF INCOME TAX, JOINT COMMISSIONER OF INCOME TAX, JOINT COMMISSIONER OF INCOME TAX, RANGE RANGE RANGE RANGE- -- -39, NEW DELHI. 39, NEW DELHI. 39, NEW DELHI. 39, NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR