M/s. I.J. Tools & Castings P.Ltd., Jalandhar V. The Additional CIT, Jalandhar

ITA 756/ASR/2013

• Counselvise Citation: 75620914 RSA 2013
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-03-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 26-12-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: EPASS JALANDHAR JALANDHAR
• Keywords: Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 756 (ASR)/2013 ASSESSMENT YEAR: 2007-08 PAN:AAACJ3745L M/S I. J. TOOLS & CASTINGS (P) LTD. VS. ADDITIONA L COMMISSIONER OF 64-65, G.T. ROAD, AMAN NAGAR, INCOME TAX, RANGE-I I, BYE-PASS, JALANDHAR JALANDHAR (APPELLANT) (RESPONDENT) APPELLANT BY: SH. SURINDER MAHAJAN, CA RESPONDENT BY: SH. TARSEM LAL, DR DATE OF HEARING: 20.03.2014 DATE OF PRONOUNCEMENT: 21.03.2014 ORDER PER BENCH 1) THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST IMPUGNED ORDER DATED 09.10.2013 PASSED BY THE COMMISSIONER O F INCOME TAX (APPEALS), JALANDHAR , FOR THE ASSESSMENT YEAR 2007 -08. 2) THE FACTS RELATING TO THE ISSUES IN DISPUTE IS T HAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE COMPANY HAS DEBIT ED AN AMOUNT OF RS. 23,78,800/- UNDER THE HEAD FOREIGN TRAVEL EXPENSES. THIS INCLUDES EXPENSED OF RS. 12,12,000/- AND RS. 11,66,800/- ON TWO TRIPS TO USA AND CANADA BY THE MANAGING DIRECTOR, NAMELY, SH. INDERJ IT. DURING THE 2 COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER ASKED THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE TO GIVE D ETAILS AND SUPPORTING EVIDENCES REGARDING THESE FOREIGN TRAVELLING EXPENS ES LIKE WHO TRAVELLED, PURPOSE OF TRAVEL, DETAILS OF EXPENSES INCURRED, BU SINESS PROCURED ON SUCH FOREIGN TRAVEL AND PROOF OF UTILIZATION OF FOREIGN CURRENCY AS SIMILAR DISALLOWANCE WAS MADE IN THE CASE OF THE ASSESSEE I N THE EARLIER AYS ALSO. THE DETAILS IN THIS REGARD WERE FURNISHED BUT DOCUM ENTARY EVIDENCE REGARDING UTILIZATION OF FOREIGN CURRENCY WAS NOT F ILED. ONLY SELF GENERATED VOUCHERS REGARDING UTILIZATION OF FOREIGN CURRENCY WERE PRODUCED WHICH MAINLY RELATE TO EXPENSES LIKE HOTEL STAY, CAR, TELEPHONE, FOOD ETC. IT WAS ALSO INFORMED THAT THE LEARNED CIT (A), JALANDHAR, IN THE CASE OF THE ASSESSEE FOR A.Y. 2006-07 HAD RESTRICTE D THE DISALLOWANCE OF FOREIGN CURRENCY EXPENSES OUT OF FOREIGN TRAVEL EXP ENSES TO 1/5 TH . CONSEQUENTLY, THE ASSESSING OFFICER WHILE MAKING AS SESSMENT, HAS MADE ADDITION OF RS. 3,36,300/- OUT OF FOREIGN TRAVELLIN G EXPENSES BEING 20% OF FOREIGN CURRENCY INCURRED ON MANAGING DIRECTOR R EDUCED BY AMOUNT ON WHICH FBT HAS BEEN PAID. BEING AGGRIEVED WITH TH E ASSESSMENT ORDER DATED 24.12.2009, THE ASSESSEE FILED AN APPEAL BEFO RE LEARNED CIT(A), JALANDHAR, WHO VIDE IMPUGNED ORDER DATED 09.10.2013 , REDUCED THE ADDITION BY 50% AND CONFIRMED THE ADDITION OF RS. 1 ,68,150/- AND PARTLY 3 ALLOWED THE APPEAL OF THE ASSESSEE. NOW, AGAIN THE ASSESSEE BEING AGGRIEVED WITH THE IMPUGNED ORDER FILED THE PRESENT APPEAL. 3) LEARNED COUNSEL FOR ASSESSEE STATED THAT THE ASS ESSEE HAS FILED ALL THE DOCUMENTARY EVIDENCES BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE LEARNED FIRST APPELLATE AUTHORITY BUT TH E SAME HAVE NOT BEEN PROPERLY APPRECIATED BY BOTH REVENUE AUTHORITIES AN D LEARNED CIT(A) HAS WRONGLY CONFIRMED 50% OF THE DISALLOWANCE MADE BY T HE ASSESSING OFFICER, AMOUNTING TO RS. 1,68,150/-. HE FURTHER ST ATED THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND THERE CANNOT BE ANY P ERSONAL EXPENSES OF THE COMPANY AND NO DISALLOWANCE IS REQUIRED IN THE PRESENT CASE, AS HAS BEEN DISCUSSED IN MANY CASES I.E. DEPUTY COMMISSION ER OF INCOME TAX VS. SARUP TANNERIES LTD, I.T.A.T., AMRITSAR BENCH ( 2009) 121 TTJ (ASR) 388 : (2009) 19 DTR 322; METALLIZING EQUIPMENT CO. (P) LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX, I.T.A.T., JODHPU R BENCH (2001) 70 TTJ (JD) 358; USHA RECTIFIER CORPORATION (I) PVT . LTD. VS. INSPECTING ASSISTANT COMMISSIONER I.T.A.T., DELHI A BENCH (1 989) 35 TTJ (DEL) 602; BHARAT MOTOR PARCEL SERVICE VS. INCOME TAX OFF ICER, I.T.A.T. HYDERABAD A BENCH (1992) 44 TTJ (HYD) 404 : 47 IT D 140 ETC. ACCORDINGLY, HE REQUESTED THAT THE ADDITION IN DISP UTE MAY BE DELETED. 4 4) ON THE CONTRARY, LEARNED DR RELIED UPON THE ORDE R PASSED BY LEARNED CIT(A), JALANDHAR. 5) WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDERS PASSED BY THE REVENUE AUTHORITIES AND WE ARE OF THE VIEW THAT THE ONLY DISPUTE IN THI S APPEAL IS REGARDING DISALLOWANCE OF FOREIGN TRAVELLING EXPENSES OF MANA GING DIRECTOR, NAMELY, INDERJIT, AMOUNTING TO RS. 1,68,150/-. KEEP ING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AS WELL AS TH E DECIDED CASES, AS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE , WE ARE OF THE CONSIDERED VIEW THAT NO DOUBT THE ASSESSING OFFICER HAS MADE A DISALLOWANCE @ 20% ON ACCOUNT OF FOREIGN EXPENSE IN CURRED ON TRAVELLING OF MANAGING DIRECTOR OF THE ASSESSEE-COM PANY ON THE BASIS OF ASSESSMENT YEAR 2006-07 IN THE ASSESSEES OWN CASE BUT THE LEARNED FIRST APPELLATE AUTHORITY RESTRICTED THE TOTAL DISALLOWAN CE TO 50%. 6) KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE, WE ARE OF THE VIEW THAT NO DOUBT THE DISALLOW ANCE IN DISPUTE HAS BEEN MADE BY THE REVENUE AUTHORITY FOR WANT OF SUPP ORTING DOCUMENTARY EVIDENCE. BUT, IN OUR VIEW, THE DISALLOWANCE MADE B Y THE REVENUE AUTHORITY IS ON VERY HIGHER SIDE, WHICH IS ON THE B ASIS OF ESTIMATION. IN THE INTEREST OF JUSTICE, IT WOULD BE FAIR AND REASO NABLE IF 10% OF THE TOTAL 5 DISALLOWANCE AMOUNTING TO RS. 33,630/- BE MADE. THE ASSESSING OFFICER IS DIRECTED TO MAKE A DISALLOWANCE OF RS. 33,630/- WHICH IS @ 10% OUT OF THE TOTAL DISALLOWANCE I.E. 3,36,300/-. 7) IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST MARCH, 2014 SD/./- SD/./- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21 ST MARCH, 2014 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S I. J. TOOLS & CASTINGS (P) LTD, 64-65, G.T. ROAD, AMAN NAGAR, BYE-PASS, JALANDHAR 2. ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE-II, JA LANDHAR 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.