EDIT SYSEMS P. LTD, MUMBAI V. ITO 8(1)(3), MUMBAI

ITA 8453/MUM/2011

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7761 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: E
• Next Hearing Date: 26-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 13-12-2011
• Court: TRIBUNAL
• Department Lawyers: POOJA SWARUP
• Assessee Lawyers: RADHA REGE
• Keywords: Business expenditure; Onus to prove
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER I.T.A. NO.8453/M/2011 (ASSESSMENT YEAR: 2008 - 2009 ) EDIT SYSTEMS PRIVATE LIMITED, A - 001, DATTA GURUKRUPA CHS LTD., N.C. KELKAR ROAD, OPP. PLAZA CINEMA, DADAR (W), MUMBAI 400 028. / VS. INCOME TAX OFFICER 8(1)(3), R.NO.206, 2 ND FLOOR, AAYAKAR BHAVAN, MUMBAI 400 020. ./ PAN : AAACE6541K ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : MS. RADHA REGE, / RESPONDENT BY : MS. POOJA SWARUP, DR / DATE OF HEARING : 06 .03.2017 / DATE OF PRONOUNCEMENT : 17 .03.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 13.12.2011 IS AGAINST THE ORDER OF THE CIT (A) - 16, MUMBAI DATED 20.09.2011 FOR THE ASSESSMENT YEAR 2008 - 2009. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUND S WHICH READ AS UNDER: - 1. THE CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE OF FOREIGN TRAVEL EXPENSES AGGREGATING TO RS. 2,07,347/ - ON THE ALLEGED GROUND THAT THE APPELLANT WAS NOT ABLE TO SUBMIT ANY DOCUMENTARY EVIDENCE TO PROVE THAT THE SAID EXPENDITURE WAS INCURRED FOR THE PURPOSE OF BUSINESS OF THE APPELLANT. 2. THE CIT (A) HAS ERRED IN UPHOLDING THE ACTION OF THE AO TO LEVY INTEREST U/S 234B AND 234C OF THE ACT. 2. AT THE OUTSET, BRINGING OUR ATTENTION TO THE ABOVE GROUNDS, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SOLITARY ISSUE RAISED IN THE GROUNDS RELATES TO THE DISALLOWANCE OF RS. 2,07,342/ - DEBITED TO THE P & L ACCOUNT ON ACCOUNT OF FOREIGN TRAVEL. THIS AMOUNT INCLUDES TICKET CHARGES FOR TRAVELLING FROM INDIA TO UNITED KINGDOM AMOUNTING TO RS. 98,753/ - AND THE BALANCE SUM OF RS. 1,08,594/ - PERTAINS TO LODGING AND BOARDING CHARGES. ASSESSEE TRAVELLED TO UK WITH HIS SPOUSE AND CLAIMED THE SAME , BEING TRAINING IN THE SOFTWARE LANGUAGES, AS BUSINESS EXPENSES. 2 IN THIS REGARD, ASS ESSEE FILED SOME GENERAL AGREEMENT WITH CERTAIN INSTITUTES ABROAD. HOWEVER, IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS NO EVIDENCE WHATSOEVER TO DEMONSTRATE THAT THE FOREIGN TRAVEL FOR THE COUPLE WAS MEANT FOR BUSINESS PURPOSES. THE CORRESPONDENCE RE QUIRED FOR ESTABLISHING THE BUSINESS PURPOSES WAS NOT FILED EITHER DURING THE ASSESSMENT PROCEEDINGS OR DURING THE PROCEEDINGS BEFORE THE FAA. 3. DURING THE FIRST APPELLATE PROCEEDINGS, ON FINDING THAT THE ASSESSEE DOES NOT HAVE ANY EVIDENCE IN SUPPORT OF BUSINESS NATURE OF THE EXPENDITURE, CIT (A) CONFIRMED THE ADDITI ON. PARA 3.3.1 OF THE CIT (A)S ORDER IS RELEVANT IN THIS REGARD. AGGRIEVED, ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 4. DURING THE PROCEEDINGS BEFORE US, LD COUNSEL FOR THE ASSESSE E REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. 5. ON THE OTHER HAND, LD DR FOR THE REVENUE RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 6. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL A S THE RELEVANT MATERIAL PLACED BEFORE US, WE FIND, THE SAID PARA 3.3.1 OF THE CIT (A)S ORDER IS RELEVANT IN THIS REGARD. CONSIDERING THE SIGNIFICANCE AND FOR THE SAKE OF COMPLETENESS OF THIS ORDER, THE SAID PARA 3.3.1 OF THE CIT (A)S ORDER IS EXTRACTED AS UNDER: - 3.3.1. I HAVE CAREFULLY CONSIDERED THE CONTENTION OF THE APPELLANT COMPANY AS WELL AS CAREFULLY GONE THROUGH THE AVAILABLE DOCUMENTS ON RECORD. I FIND THAT THE APPELLANT BEFORE THE LD AO DID NOT SUBMIT ANY DOCUMENTS AS REGARDS TO THE JUST IFICATION WITH THE DIRECTORS VISIT TO VARIOUS COUNTRIES. THE LD AO FOUND THE DIRECTOR OF THE APPELLANT COMPANY VISITED THE SEVERAL COUNTRIES AND MET DIFFERENT FACULTIES AND THE HEAD OF THE DEPARTMENT AND BUSINESS MANAGERS OF THE UNIVERSITIES TO EXPOSE THE POSSIBILITY OF THE TIE UP. IT WAS ALSO SUBMITTED BY THE APPELLANT THAT THE APPELLANT ENTERED INTO A PARTNERSHIP WITH CENTRUM ASSOCIATES LTD ON 25.09.2010, A PERIOD WHICH DOES NOT PERTAIN TO YEAR UNDER CONSIDERATION. THE LD AO FOOD THAT THE APPELLANT IS NOT ABLE TO PRODUCE ANY LETTERS OR CORRESPONDENCE TO SHOW THAT THEY WERE INVITED TO THOSE UNIVERSITIES FOR A POSSIBLE TIE UP. IN VIEW OF THIS, I FIND THAT THE APPELLANT WAS NOT ABLE TO DISCHARGE ITS ONUS TO PROVE THAT THE EXPENDITURE IN QUESTION WAS FOR T HE PURPOSES OF THE APPELLANTS BUSINESS. THE APPELLANT FILED CERTAIN CORRESPONDENCE AFTER THE DATE OF HEARING, HOWEVER, WHICH DOES NOT THROUGH ANY LIGHT ON THE FACT THAT THE APPELLANT WAS INVITED TO VISIT THE UNIVERSITY. ON THE CONTRARY, IT SHOWS THAT TH AT THE APPELLANT WAS ALREADY IN THAT COUNTRY TO VISIT THE UNIVERSITY. FURTHER, THE DOCUMENTS WERE NOT BEFORE THE LD AO AND THE APPELLANT HAD ALSO NOT FLED THE APPLICATION FOR ADMISSION OF THE SAME UNDER RULE 46A, THE EVIDENCE CANNOT BE ADMITTED AT THIS ST AGE. THE ADDITION MADE BY THE LD AO IS ACCORDINGLY CONFIRMED. THIS GROUND OF APPEAL IS THUS DISMISSED. 7. CONSIDERING THE ABOVE ADMITTED POSITION REGARDING THE ABSENCE OF ANY DIRECT EVIDENCE IN SUPPORT OF THE CLAIM OF THE ASSESSEE, WE ARE OF THE OPINIO N, THE ORDER OF 3 THE CIT (A) CONFIRMING THE ADDITION MADE BY THE AO IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PR ONOUN CED IN THE OPEN COURT ON 17 TH MARCH, 201 7 . SD/ - SD/ - (SANDEEP GOSAIN) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 17.03 .201 7 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI