M/s. Apex Extrusions Pvt.Ltd., Baroda V. The Dy.CIT.,Circle-1(1), Baroda

ITA 962/AHD/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6001 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 09-04-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 01-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL SRDR
• Assessee Lawyers: PARIMALSINH PARMAR

Judgement Text

, , , , B, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.962/AHD/2011 [ASSTT.YEAR : 2005-2006] APEX EXTRUSIONS PVT. LTD. 220/221, GIDC MAKARPURA BARODA. PAN : AAECA 1516 E /VS. DCIT, CIR.1(1) BARODA. ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) 1& 2 3 )/ ASSESSEE BY : SHRI PARIMALSINH PARMAR + 2 3 )/ REVENUE BY : SHRI P.L. KUREEL, SR.DR 5 2 &(*/ DATE OF HEARING : 9 TH APRIL, 2014 678 2 &(*/ DATE OF PRONOUNCEMENT : 02-05-2014 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-2006 IS DIRECTED AGAINST T HE ORDER OF THE CIT(A). 2. THE ONLY GROUND OF THE APPEAL OF THE ASSESSEE IS AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF YOUR APPELLAN TS CASE AS WELL AS IN LAW, THE LD.CIT(A) HAS ERRED IN CONFIRMI NG DISALLOWANCE TO THE TUNE OF RS.1,56,000/- IN RESPECT OF FOREIGN TRA VELING EXPENDITURE ON ADHOC BASIS. ITA NO.962/AHD/2011 -2- 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF ALUMINU M TUBES AND CONTAINERS. HE SUBMITTED THAT A DISALLOWANCE OF 2 0% OF THE FOREIGN TOUR EXPENSES AMOUNTING TO RS.1,56,000/- WAS MADE ON AD HOC BASIS, BY THE AO AND THE SAME WAS CONFIRMED BY THE CIT(A). HE SU BMITTED THAT THE THREE KEY-PERSONS OF THE ASSESSEE-COMPANY VISITED C ERTAIN COUNTRIES IN EUROPE TO ATTEND TRADE-FAIR FOR PLASTIC INDUSTRIES BETWEEN 23 RD OCTOBER, 2004 TO 3 RD NOVEMBER, 2004. THE CIT(A) HAS CONFIRMED THE DISA LLOWANCE BY OBSERVING THAT THE TOUR FROM 28 TH OCT. TO 2 ND NOVEMBER, 2004 WAS ENTIRELY FOR PLEASURE PURPOSES, AND THEREFORE, THE EXPENDITURE THEREON WAS RIGHTLY DISALLOWED BY THE DEPARTMENT. HE SUBMITTED THAT THE TOUR PRIMARILY WAS FOR BUSINESS PURPOSE OF ATTENDING THE TRADE-FAI R FOR PLASTIC INDUSTRIES AND THE RETURN JOURNEY WAS THROUGH CERTAIN COUNTRIE S OF EUROPE TO SEE PLASTIC INDUSTRIES THERE, AND WAS PURELY FOR BUSINE SS PURPOSE. THE LEARNED DR HAS OPPOSED THE SUBMISSIONS OF THE LEARNED COUNS EL FOR THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE COULD NOT PROVE THE BUSINESS PURPOSE OF THE FOREIGN TOUR FROM 28 TH OCTOBER TO 2 ND NOVEMBER, 2004. HE RELIED ON THE ORDERS OF THE AO AND THE CIT(A). 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS. IN THE FA CTS AND CIRCUMSTANCES OF THE CASE WE HOLD THAT THE PRIMARY PURPOSE OF THE FOREIGN TOUR UNDERTAKEN BY THREE PERSONS OF THE ASSESSEE-CO MPANY WAS FOR BUSINESS PURPOSE TO ATTEND THE TRADE-FAIR FOR PLAST IC INDUSTRIES BETWEEN 23 RD OCT TO 27 TH OCTOBER, 2004 IN GERMANY. THE CLAIM OF THE ASSESS EE WAS THAT THE RETURN JOURNEY WAS UNDERTAKEN THROUGH HOLLAND, BELGIUM AND FRANCE FROM 28 TH OCTOBER, 2004 SO THAT THREE PERSONS OF THE ASSESSE E-COMPANY COULD SEE THE PLASTIC INDUSTRIES THERE ALSO. THIS CLAIM OF THE ASSESSEE COULD NOT BE PROVED BY THE ASSESSEE BY FILING ANY DOCUMEN TARY ITA NO.962/AHD/2011 -3- EVIDENCE TO SUPPORT THE SAME. CONSIDERING THE TOTA LITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT SOME ELEMENT OF PERSONAL PURPOSE THROUGH RETURN JOURNEY OF THREE KE Y PERSONS OF THE ASSESSEE COMPANY FROM 28 TH OCTOBER TO 2 ND NOVEMBER, 2004 COULD NOT BE RULED OUT, AND ACCORDINGLY, THE ENDS OF JUSTICE SHA LL BE MET IF THE DISALLOWANCE IS RESTRICTED TO RS.78,000/- REPRESENT ING 10% OF THE TOTAL EXPENSES, AS AGAINST 20% DISALLOWANCE CONFIRMED BY THE CIT(A) AND THE GROUND OF THE APPEAL OF THE ASSESSEE IS PARTLY ALLO WED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( .. /G.C. GUPTA ) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD