DINESH KHANNA HOTELS, MOTESL & RESORTS PVT. LTD., MUMBAI V. D.C.I.T. C.C. 35, MUMBAI

ITA 8679/MUM/2011

• Counselvise Citation: 867919914 RSA 2011
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 03-05-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 22-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARASARTH NAIK
• Assessee Lawyers: PARESH VAKHARIA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH: MUMBAI BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.8679/MUM/2011 (ASSESSMENT YEAR: 2008-09) DINESH KHANNA HOTELS, MOTELS AND RESORTS PVT. LTD., 197-THE CLUB, D.N. NAGAR, ANDHERI-WEST, MUMBAI -400 053 ..... APPELLANT VS DCIT, CC-35, MUMBAI .... RESPONDENT PAN : AABCD 2166 J APPELLANT BY: SHRI PARESH VAKHARIA RESPONDENT BY: SHRI PARASARTH NAIK DATE OF HEARING: 03.05.2012 DATE OF PRONOUNCEMENT: 01.06.2012 O R D E R R.S. PADVEKAR, JM: IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE IMPU GNED ORDER OF THE LD. CIT (A)-41, MUMBAI DATED 19.10.2011 FOR THE A.Y. 2008-09. THE FIRST ISSUE IS DISALLOWANCE OF ` 95,543/- OUT OF TRAINING AND DEVELOPMENT EXPENSES AND SECOND ISSUE IS IN RESPECT OF DISALLOW ANCE OF ` 45,611/- OUT OF STAFF WELFARE EXPENSES. 2. THE FACTS WHICH REVEALED FROM THE RECORD ARE AS UNDER. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF HEALTH CLUB SERVICES AND OTHER SPORTS ACTIVITIES. AS OBSERVED BY THE A.O. THE ASS ESSEE DEBITED STAFF WELFARE EXPENSES OF ` 4,56,110/-. IT IS FURTHER OBSERVED THAT ON VERIFICATION IT WAS FOUND THAT SOME OF THE VOUCHERS WERE NOT HAVING PROPER SUPPORTING BILLS. THE A.O. MADE DISALLOWANC E TO THE EXTENT OF ` 45,611/-, WHICH WAS 10% OF THE TOTAL EXPENDITURE. IN RESPECT OF THE ITA NO.8679/MUM/2011 DINESH KHANNA HOTELS, MOTELS AND RESORTS PVT. LTD. 2 TRAINING AND DEVELOPMENT EXPENSES, IT WAS NOTICED B Y THE A.O. THAT THE ASSESSEE HAS DEBITED ` 9,55,435/- IN THE PROFIT AND LOSS ACCOUNT. THE A.O. ASKED THE ASSESSEE TO PRODUCE THE DETAILS OF T RAVELING AND DEVELOPMENT EXPENSES. THE ASSESSEE CONTENDED THAT THE SAID EXPENDITURE WAS INCURRED TOWARDS TRAINING AND DEVEL OPMENT OF PERSONNEL. THE A.O. HAD RESERVATION IN ALLOWING EN TIRE EXPENDITURE OF THE ASSESSEE, AS OBSERVED BY HIM THERE WERE NO PROP ER SUPPORTING BILLS. HE, THEREFORE, DISALLOWED 10% OUT OF STAFF WELFARE EXPENSES AND MADE ADDITION OF ` 95,543/-. BOTH THE ADDITIONS WERE CONFIRMED BY TH E LD. CIT (A). 3. I HAVE HEARD THE PARTIES AND PERUSED THE RECORDS . THE LD. COUNSEL FILED COPIES OF THE BILLS. HIS MAIN ARGUME NT IS THAT ALL THE EXPENDITURE IS DULY SUPPORTED BY THE VOUCHERS. HE TOOK ME THROUGH PAPER BOOK IN WHICH THE COPIES OF BILLS AND OTHER D ETAILS ARE FILED. HE SUBMITS THAT WITHOUT POINTING OUT ANY SINGLE INSTAN CE, THE A.O. HAS MADE THE AD-HOC DISALLOWANCE. HE FURTHER SUBMITS T HAT THE ASSESSEE HAS ALREADY PAID THE FRINGE BENEFIT TAX (FBT) AND H ENCE, OTHERWISE ALSO NO DISALLOWANCE CAN BE MADE. HE REFERRED TO THE CI RCULAR NO.8 OF 2005 DATED 29.08.2005 ISSUED BY THE CBDT. I HAVE ALSO H EARD THE LD. D.R. I FIND THAT 90% OF THE EXPENDITURE HAS BEEN ACCEPTED BY BOTH THE AUTHORITIES BELOW. THOUGH, THE A.O. HAS OBSERVED TH AT SOME VOUCHERS WERE NOT SUPPORTED WITH THE PROPER BILLS THEN A.O. SHOULD HAVE GIVEN SOME INSTANCES OF THE EXPENSES WHICH IN HIS OPINION DID NOT DESERVE TO BE ALLOWED U/S.37(1). I FIND THAT THE OBSERVATIONS OF THE A.O. ARE OF A ROUTINE NATURE. I DO NOT FIND ANY JUSTIFICATION TO SUPPORT THE AD-HOC DISALLOWANCE MADE BY THE A.O. AS I FIND THAT THE AS SESSEE HAS FILED SUBSTANTIAL EVIDENCE TO PROVE THAT THE EXPENDITURE IS SUPPORTED BY THE BILLS. CONSIDERING THE EVIDENCE FILED BY THE ASSES SEE IN THE PAPER BOOK I DELETE BOTH THE ADDITIONS. 4. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ITA NO.8679/MUM/2011 DINESH KHANNA HOTELS, MOTELS AND RESORTS PVT. LTD. 3 ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 1 ST JUNE 2012. SD/- ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE: 1ST JUNE 2012 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) 41, MUMBAI. 4) THE CIT-CENTRAL-I, MUMBAI. 5) THE D.R. SMC BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN