The ACIT- Circle-I(2), Baroda v. M/s. JMSL Websolution Pvt. Ltd.,, Baroda

ITA 1069/AHD/2014 | 2010-2011
Pronouncement Date: 04-10-2016 | Result: Dismissed

Appeal Details

RSA Number 106920514 RSA 2014
Assessee PAN AABCJ6990J
Bench Ahmedabad
Appeal Number ITA 1069/AHD/2014
Duration Of Justice 2 year(s) 5 month(s) 23 day(s)
Appellant The ACIT- Circle-I(2), Baroda
Respondent M/s. JMSL Websolution Pvt. Ltd.,, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 04-10-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 04-10-2016
Date Of Final Hearing 03-10-2016
Next Hearing Date 03-10-2016
Assessment Year 2010-2011
Appeal Filed On 11-04-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD .. BEFORE SHRI N.K. BILLAIYA ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD JUDICIAL MEMBER ./ I.T.A. NO.1069/AHD/2014 ( / ASSESSMENT YEAR : 2010-11) THE ACIT CIRCLE-1(2) BARODA / VS. M/S.JMSL WEBSOLUTION PVT LTD. 91 KUNJ SOCIETY ALKAPURI BARODA PIN 390 007 $ ./ ./ PAN/GIR NO. : AABCJ 6990 J ( $' / APPELLANT ) .. ( ($' / RESPONDENT ) $') / APPELLANT BY : SHRI PRASOON KABRA SR.DR ($'*) / RESPONDENT BY : -NONE- + *-. / DATE OF HEARING 03/10/2016 /012*-. / DATE OF PRONOUNCEMENT 04/10/2016 / O R D E R PER SHRI MAHAVIR PRASAD JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-I BARODA DATE D 02/01/2014 FOR THE ASSESSMENT YEAR (AY) 2010-11. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE ID. CIT(APPEALS) ERRED IN DELETING THE ADDITION/DISALLO WANCE OF CONSULTANCY CHARGES OF RS. 31 41 320/- PAID TO JEEVANSURAKSHA M EDICARE SERVICES ITA NO.1069/AHD /2014 ACIT VS. M/S.JMSL WEBSOLUTION PVT.LTD. ASST.YEAR 390 007 - 2 - LTD. WITHOUT APPRECIATING THE FACT THAT THAT THE EX PENDITURE WAS NOT INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE ON THE FACT OF ASSESSEE'S CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE ID. CIT(APPEALS) ERRED IN DELETING THE ADDITION OF RS.22 67 133/- MADE ON ACCOUNT OF DISALLOWANCE OF T HE CLAIM OF COMMISSION PAYABLE TO ASSOCIATES WITHOUT APPRECIATI NG THE FACT THAT THE ASSESSEE FAILED TO PROVE THAT THESE EXPENDITURES WE RE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW LD. CIT(APPEALS) ERRED IN DELETING THE ADDITION OF RS.1 31 860/- MADE ON ACCOUNT OF DISALLOWANCE OF CLAIM OF GOOD HEALTH EXP ENSES WITHOUT APPRECIATING THE FACT THAT THE EXPENDITURE WAS NOT INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE ASSE SSEE ON THE FACT OF ASSESSEE'S CASE. 2. ON THE DATE OF HEARING NONE APPEARED ON BEHAL F OF RESPONDENT- ASSESSEE NOR ANY APPLICATION FOR ADJOURNMENT OF HEA RING HAS BEEN FILED. SINCE THERE IS NO APPEARANCE ON BEHALF OF ASSESSEE WE PROCEED TO DECIDE THE APPEAL EX - PARTE QUA THE ASSESSEE ON THE BASIS OF DETAILS AVAILAB LE ON RECORD. ALL THE GROUNDS ARE INTER-CONNECTED AND TH EREFORE THE SAME ARE DECIDED TOGETHER. 2.1. THE RELEVANT FACTS AS CULLED OUT FROM THE MATE RIALS ON RECORD ARE AS UNDER:- 2.2. ASSESSEE IS A COMPANY STATED TO BE ENGAGED I N THE BUSINESS FOR PROVIDING INDUSTRIAL COATING AND CORROSION SOLUTION S IN VARIED SECTORS OF ITA NO.1069/AHD /2014 ACIT VS. M/S.JMSL WEBSOLUTION PVT.LTD. ASST.YEAR 390 007 - 3 - INDUSTRIES. ASSESSEE ELECTRONICALLY FILED ITS RE TURN OF INCOME DECLARING TOTAL INCOME AT RS.30 08 606/- ON 30/09/2009. TH E CASE WAS SELECTED THROUGH CASS FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S. 143(3) OF THE INCOME TAX ACT 1961 (HEREINAFTER REF ERRED TO AS 'THE ACT') VIDE ORDER DATED 17/01/2013 AND THE TOTAL INCOME WAS DETERMINED AT RS.29 24 150/-. AGGRIEVED BY THE ORDER OF THE ASSE SSING OFFICER (AO) ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A) W HO VIDE ORDER DATED 02/01/2014(IN APPEAL NO.CAB-I/325/2012-13) ALLOWED THE APPEAL OF THE ASSESSEE. THE RELEVANT FINDINGS OF THE LD.CIT( A) ARE AS UNDER:- GROUND NO.1 7.5. IN VIEW OF ABOVE ORDER U/S.119 OF THE ACT OF T HE CBDT THE DUE DATE FOR FILING THE RETURN OF INCOME WAS EXTEND ED FOR THE AY UNDER CONSIDERATION FROM 10/09/2010 TO 15/10/2010 A ND THEREFORE PAYMENT OF RS.14 43 275/- AS PAID BY THE APPELLANT ON 01/10/2010 IS ALLOWABLE U/S.43B OF THE IT ACT. IN VIEW OF THI S THE DISALLOWANCE OF RS.14 43 275/- AS MADE BY THE AO U/S.43B OF THE IT ACT IS HEREBY DELETED. THUS THE GROUND OF APPEAL NO.2 OF THE APPELLANT IS ALLOWED. GROUND NO.2 7.6 THE GROUND NO. 3 OF THE APPEAL OF THE APPELLA NT IS THAT THE LD. ASSESSING OFFICER ERRED IN DISALLOWING COMMISSION P AYABLE TO ASSOCIATES AMOUNTING TO RS.22 67 133/-. WITH REGARD TO THIS GROUND OF APPEAL THE AO IN THE ASSESSMENT ORDER HAS MENTIONE D THAT THE COMMISSION PAYABLE TO ASSOCIATES OF RS.22 67 133/- WAS ASKED TO BE JUSTIFIED VIDE THE ORDER SHEET ENTRY. AS PER THE AO THE AR OF THE ASSESSEE COULD NOT SUBSTANTIATE THE PAYABLES TO ASS OCIATES AS ACTUALLY PAID IN SUBSEQUENT YEAR. AS PER THE AO MOREOVER TH E DETAILS OF THE ITA NO.1069/AHD /2014 ACIT VS. M/S.JMSL WEBSOLUTION PVT.LTD. ASST.YEAR 390 007 - 4 - PAYABLES WERE ALSO NOT VERIFIABLE. AS PER THE AO T HEREFORE THE COMMISSION PAYABLE TO ASSOCIATES BEING UNVERIFIABLE LIABILITY AMOUNTING TO RS. 22 36 133/- WAS ADDED TO THE RETURNED INCOME . THE AO IN HIS REMAND REPORT HAS FURTHER STATED THAT THE APPELLANT HAS NOW PRODUCED THE COPIES OF LETTERS GIVING ADVICE TO ITS BANKS AN D DETAILED NOTES OF TRANSFERRING FUND TO THE MEMBERS DURING THE SUBSEQU ENT FINANCIAL YEAR. AS PER THE AO AS PER THE SUBMISSION OF BANK REMITT ANCE DETAILS IT IS REVEALED THAT AN AMOUNT OF RS. 16 20 680 WAS PAID D URING THE SUBSEQUENT YEAR AND RS.6 46 453/- WAS STILL UNPAID. THUS AS PER THE A.O. AN AMOUNT OF RS.6 46 453/- IS STILL COMMISSION PAYABLE IN THE SUBSEQUENT YEAR. THE AO IN HIS REPORT HAS MENTIONED THAT THE VERACITY OF PAYMENT WAS NOT THE BASIS OF ADDITION. AS PER TH E AO THE DISALLOWANCE/ADDITION WAS MADE DUE TO UNVERIFIABLE NATURE OF THE PAYMENTS (HERE COMMISSION PAYABLE) BEING MADE. THU S AS PER THE AO NOW THE EVIDENCE OF SUBSEQUENT PAYMENT STILL DO NOT QUALIFY THE COMMISSION PAYABLE AMOUNT AS A PAYMENT MADE FOR THE BUSINESS PURPOSE. IT IS FURTHER STATED BY THE AO THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE APPELLANT WAS ASKED TO JUSTIFY THE COMMISSION PAYABLE TO ASSOCIATES OF RS.22 67 275/ -. AS PER THE AO THOUGH SUFFICIENT OPPORTUNITY WAS PROVIDED TO THE A PPELLANT THE AR OF THE APPELLANT COULD NOT SUBSTANTIATE THE PAYABLES T O ASSOCIATES AS ACTUALLY PAID IN THE SUBSEQUENT YEAR. AS PER THE AO MOREOVER THE DETAILS OF THE PAYABLES WERE ALSO NOT VERIFIABLE. A S PER THE AO THE APPELLANT COULD NOT PROVE THE BUSINESS PURPOSE ACHI EVED AGAINST SUCH LIABILITY CREATED. AS PER THE AO THEREFORE THE BA SIS OF ADDITION WAS ON TWO COUNTS I.E. THE COMMISSION PAYABLE OF RS.22 67 275/- WAS UNVERIFIABLE AS TO WHO ALL WERE THE PERSONS TO WHOM SUCH PAYMENT WAS DUE TO BE PAID. SECONDLY THE BUSINESS PURPOSE ACHI EVED AGAINST SUCH COMMISSION PAYABLE ALSO COULD NOT BE SUBSTANTIATED. 7.7 FROM THE ABOVE REASONS AS MENTIONED BY THE AO F OR MAKING ADDITION OF RS. 22 67 275/- IT CAN BE SEEN THAT THE VERACITY OF PAYMENT WAS NOT THE BASIS OF ADDITION. IN OTHER WORDS THE AO HAS NOT QUESTIONED THE VERACITY OF THE PAYMENT. THE BASIS FOR MAKING T HE ADDITION WAS THAT THE COMMISSION PAYABLE WAS UNVERIFIABLE AS TO WHO A LL WERE THE PERSONS TO WHOM SUCH PAYMENT WAS DUE TO BE PAID. ANOTHER RE ASON FOR MAKING THE PAYMENT IS THAT WHETHER SUCH PAYMENT WAS MADE F OR THE BUSINESS ITA NO.1069/AHD /2014 ACIT VS. M/S.JMSL WEBSOLUTION PVT.LTD. ASST.YEAR 390 007 - 5 - PURPOSE OF THE APPELLANT. BUT THESE TWO GROUNDS ON WHICH ADDITION HAS BEEN MADE BY THE AO ARE NOT FOUND TO BE SUSTAINABLE . IT IS NOT UNDERSTANDABLE AS TO WHY THE COMMISSION OF RS. 22 6 7 275/- AS MADE BY THE APPELLANT WAS NOT VERIFIABLE. IT APPEARS THAT T HE AO HAS EITHER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR AT T HE TIME OF REMAND PROCEEDINGS HAVE NOT MADE ANY EFFORT TO VERIFY THES E PAYMENTS BY MAKING EXAMINATION AND CROSS EXAMINATION IN SOME OF THE CASES OF PAYEES. IN OUR OPINION THE AO WAS NOT PREVENTED FRO M MAKING VERIFICATION OF THE ABOVE PAYMENTS. THE ARS OF THE APPELLANT IN THEIR SUBMISSION AS FILED IN CONNECTION WITH THE REMAND REPORT OF THE AO HAVE SUBMITTED THAT THE COMPANY APPOINTS ASSOCIATES/ AGENTS WHO IN TURN RECRUIT DOWN LINE ASSOCIATES (SUB-AGENTS) AND THEREBY EACH ASSOCIATE GETS A SHARE IN THE CONTRIBUTIONS (COMMISSION) FOR RECRUITING THE MEMBERS/AS PER THE ARS THIS SHARE IN THE CONTRIBUTION IS PAID IN THE FORM OF COMMISSION TO THE RESPECTIVE AGENTS AND IDS IS ALSO DEDUCTED WHEREVER APPLICABLE FROM THE PAYMENTS MADE TO THEM. AS PER THE ARS OUT OF TOTAL COMMISSION EXPENSES INCURRED DURING THE YEAR AMOUNTING TO RS. 3 00 52 584/- A COMMISSION OF RS. 22 67 133/- WAS PAYABLE AT THE END OF THE YEAR. AS PER THE ARS THE ASSESSEE COMPAN Y HAS OVER 5000 TO 6000 AGENTS TO WHOM IT PAYS COMMISSION VARYING IN A MOUNTS. AS PER THE ARS THE NUMBER OF AGENTS TO WHOM COMMISSION OF RS. 22 67 133/- IS PAYABLE IS MORE THAN 4000 PERSON. AS PER THE ARS TO PRODUCE ALL SUCH AGENTS AND THEIR CONFIRMATIONS IS NOT POSSIBLE. AS PER THE ARS HOWEVER THE APPELLANT HAD PRODUCED NAMES OF ALL THE ASSOCIA TES ALONG WITH THEIR ADDRESSES/PAN AND DETAILS OF COMMISSION PAYABLE TO THEM AT THE TIME OF ASSESSMENT PROCEEDINGS. AS PER THE ARS SINCE THE SA ME HAD NOT BEEN VERIFIED BY THE LD. AO AT THE TIME OF ASSESSMENT PR OCEEDINGS THE APPELLANT COMPANY HAD PRODUCED THE SAME ALONG WITH THE COPIES OF CONFIRMATIONS ADDRESS AND PAN CARD OF ABOUT 18 PER SONS ALONG WITH WHICH WAS SENT TO THE AO FOR REMAND REPORT. AS PER THE AR COPY OF BANK STATEMENT OF THE APPELLANT COMPANY FOR TWO MONTHS I .E. APRIL AND MAY 2010 WHICH SHOWS COMMISSION PAYMENTS MADE TO THESE MEMBERS ALONG WITH DETAILS OF PAYMENTS OF OUTSTANDING COMMISSION MADE TO THESE MEMBERS IN THE SUBSEQUENT FINANCIAL YEAR WERE ALSO PRODUCED BEFORE THE AO AT THE TIME OF REMAND REPORT. THE AO HAS GON E THROUGH THE DETAILS AND MENTIONED IN HIS REMAND REPORT THAT OUT OF RS.22 67 133/- RS. 16 20 680/- WAS PAID IN THE SUBSEQUENT YEAR AND BALANCE ITA NO.1069/AHD /2014 ACIT VS. M/S.JMSL WEBSOLUTION PVT.LTD. ASST.YEAR 390 007 - 6 - RS.6 46 453/- WAS REMAINING UNPAID. IN THIS REGARD THE ARS HAVE SUBMITTED THAT THE AO HIMSELF ADMITTED THAT THE COM MISSION PAYMENTS WERE MADE IN THE SUBSEQUENT YEAR. AS PER THE ARS PA RT OF THE COMMISSION WHICH REMAINED UNPAID WAS PAID IN THE SU BSEQUENT YEARS. AS PER THE ARS APPELLANT COMPANY HAS PAID MAJORITY OF THE AMOUNT WHICH ITSELF PROVES ITS INTENTION TO MAKE PAYMENTS AND ALSO CONFIRMS THE FACT THAT THE PAYMENTS ARE GENUINE. AS PER THE ARS THEY HAD ALSO REQUESTED THE LD. AO TO CALL FOR CONFIRMATIONS U/S 133 (6) TO CROSS VERIFY THE OUTSTANDING WITH THE RESPECTIVE THIRD PARTIES. AS PER THE ARS HOWEVER HE HAS NOT BOTHERED TO DO SO. AS PER THE AR S THUS THIS ITSELF SHOWS THE INADEQUACY AND UNWILLINGNESS ON PART OF T HE LD. AO TO GO THE DISTANCE AND TAKE EFFORTS TO VERIFY THE TRANSACTION S IN DETAIL. AS PER THE ARS DURING THE ASSESSMENT PROCEEDINGS HE DID NOT VERIFY THE ENTIRE PAYABLES AND DISALLOWED ALL OF THE SAME AMOUNTING TO RS. 22 67 133/- AND NOW IN APPEAL PROCEEDINGS FOR REM AND REPORT HE HAS- VERIFIED AND FOUND OUT THAT MAJORITY OF PAYMENTS HA VE BEEN MET AND BALANCE RS.6 46 453/- IS OUTSTANDING. AS PER THE AR S FURTHER IN REMAND REPORT HE HAS ONLY MENTIONED THAT THIS AMOUNT IS OU TSTANDING IN SUBSEQUENT YEAR AND HE HAS NOT MADE ANY ADVERSE REM ARKS AND ACCEPTED THE GENUINENESS OF THE TRANSACTIONS. THESE ENTIRE SUBMISSIONS OF THE ARS ARE FOUND TO BE TENABLE. THE FACT IS THA T THE DETAILS WERE AVAILABLE BEFORE THE AO AND HE COULD HAVE MADE VERI FICATION ON RANDOM BASIS IN RESPECT OF SOME OF THE PARTIES. THUS THE G ROUND OF THE AO THAT THE PAYMENTS OF RS. 22 67 133/- ARE NOT VERIFIABLE CANNOT BE ACCEPTED. THE VERACITY OF THE PAYMENT HAS NOT BEEN DOUBTED. I F THE PAYMENTS ARE MADE IN SUBSEQUENT YEARS AND SOME OF THE PAYMENTS A RE SHOWN AS OUTSTANDING THE SAME CANNOT BE THE BASIS FOR MAKIN G THE ADDITION. MAKING PAYMENTS OF COMMISSION IN SUBSEQUENT YEARS C AN BE SAID TO BE A NORMAL BUSINESS ACTIVITIES. THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD TO ESTABLISH THAT THE PAYMENTS WERE NOT MADE FOR BUSINESS PURPOSE. IN MY OPINION UNLESS AND UNTIL THERE ARE C ERTAIN FINDINGS ON THE BASIS OF VERIFICATION AND CROSS VERIFICATION TO EST ABLISH THAT THE PAYMENTS OF COMMISSIONS WERE NOT GENUINE AND THE SA ME WERE NOT FOR THE BUSINESS PURPOSE THE ADDITION IN SUCH CASES AR E NOT JUSTIFIABLE. HOWEVER WITHOUT ANY PROPER FINDINGS CLAIM OF COMM ISSION CANNOT BE DISALLOWED. CONSIDERING ALL THESE FACTS IT IS HELD THAT THE AO IS NOT CORRECT IN MAKING DISALLOWANCE OF COMMISSION PAYMEN TS OF RS. ITA NO.1069/AHD /2014 ACIT VS. M/S.JMSL WEBSOLUTION PVT.LTD. ASST.YEAR 390 007 - 7 - 22 67 133/- AND THEREFORE THE SAME IS DELETED. THUS THE GROUND OF APPEAL NO. 3 OF THE APPELLANT IS ALLOWED. GROUND NO.3 7.8 THE GROUND OF APPEAL NO. 4 OF THE APPELLANT I S THAT THE LD. ASSESSING OFFICER ERRED IN DISALLOWING GOOD HEALTH EXPENSES AMOUNTING TO RS.1 31 860/-. IN THIS REGARD THE AO IN HIS ASSE SSMENT ORDER HAS MENTIONED THAT THIS AMOUNT OF RS.1 31 860/- PERT AINS TO PAYMENT OF RS.81 860/- AND RS.50 000/- MADE AGAINST CERTAIN CL AIMS. AS PER THE AO THE PAYMENT OF RS.81 860/- IS CLAIMED TO HAVE BEEN PAID TO MR. DUSHYANT FULABHAI PATEL. AS PER THE AO THE OTHER P AYMENT OF RS. 50 000/- IS OSTENSIBLY BEEN PAID FOR SOME AWARENESS PROGRAMME RELATED WITH HEALTH INSURANCE AS MENTION BY THE AR OF THE A PPELLANT. HOWEVER BOTH THESE PAYMENTS COULD NOT BE VERIFIED BY THE AR OF THE APPELLANT. AS PER THE AO THE BUSINESS PURPOSE ACHIEVED AND THE J USTIFICATION OF SUCH EXPENSES COULD NOT BE PROVED DURING THE COURSE OF T HE ASSESSMENT PROCEEDINGS. ON THE OTHER HAND THE ARS IN THEIR SU BMISSION AS FILED HAVE SUBMITTED THAT THE APPELLANT COMPANY IS ENGAGE D IN THE BUSINESS OF PROVIDING MEDICAL RELATED SERVICES TO MEMBERS WHO S UBSCRIBE TO THE MEMBERSHIP OF COMPANY. AS PER THE ARS THE COMPANY A PPOINTS ASSOCIATES/ AGENTS WHO IN TURN RECRUIT DOWN LINE AS SOCIATES (SUB-AGENTS) AND THEREBY EACH ASSOCIATE GETS A SHARE IN THE CONT RIBUTIONS (COMMISSION) FOR RECRUITING THE MEMBERS. AS PER THE ARS FURTHERMORE THE APPELLANT COMPANY TAKES GROUP INSURANCE FOR ITS MEMBERS FROM GENERAL INSURANCE COMPANIES LIKE UNITED INDIA AND O RIENTAL INSURANCE COMPANY LTD. AND THE MEMBERS COLLECTIVELY ARE ENTIT LED TO BENEFITS OF SUCH INSURANCE POLICIES TAKEN. AS PER THE ARS BUT S OMETIMES DUE TO DISPUTES ETC. THE ENTIRE CLAIM IS NOT PROCESSED BY THE INSURANCE COMPANIES. IN SUCH CIRCUMSTANCES THE APPELLANT COM PANY BEARS THE MEDICAL EXPENSES OF ITS MEMBERS. AS PER THE ARS SUCH A SITUATION DOES NOT HAPPEN EVERY TIME. AS PER THE ARS SINCE THE APPELLA NT COMPANY QUARTS MEMBERSHIPS FROM VARIOUS MEMBERS THE BENEFIT IT GIV ES IN RETURN TO AS MEMBERS IS IN THE FORM OF GROUP INSURANCE POLICIES TAKEN FOR THE MEMBERS. AS PER THE ARS THE PREMIUM IS BORNE BY THE APPELLANT COMPANY AND IT IS RESPONSIBLE TO PASS ON THE BENEFI TS OF THE INSURANCE POLICY TO ITS MEMBERS. AS PER THE ARS SO WHEN SOME MEMBER BECOMES ITA NO.1069/AHD /2014 ACIT VS. M/S.JMSL WEBSOLUTION PVT.LTD. ASST.YEAR 390 007 - 8 - SICK AND A CLAIM IS FILED UNDER NORMAL CIRCUMSTANC ES THE CLAIM IS PROCESSED AND THE APPELLANT COMPANY GETS THE CLAIM AMOUNT FROM THE INSURANCE COMPANY WHICH IS THEN PASSED ON TO THE I NDIVIDUAL MEMBER. AS PER THE ARS HOWEVER IN THE PRESENT SITUATION A CLAIM OF MR. DUSHYANT F. PATEL WAS APPLIED WHICH WAS NOT PROCESS ED BY THE INSURANCE COMPANY DUE TO SOME DISPUTE ETC. AND THE REFORE THE APPELLANT COMPANY UNDERTOOK TO BEAR THE SAME AND PA ID THE SAID AMOUNT OF RS.81 860/- TO THE SAID MEMBER. AS PER TH E AR THE SECOND ENTRY PERTAINING TO ORIENTAL INSURANCE CO. LTD. OF RS.50 000/- WAS ALSO ON ACCOUNT OF SOME DISPUTE WITH THEM AS A RESULT OF WHICH ORIENTAL INSURANCE CO. LTD. HAD DEBITED THE APPELLANT COMPAN Y'S ACCOUNT IN ITS BOOKS. AS PER THE ARS SINCE THE APPELLANT COMPANY TAKES INSURANCE POLICIES FROM ORIENTAL INSURANCE AND FILES INSURANC E CLAIMS FOR AND ON BEHALF OF IT MEMBERS SOMETIME DISPUTES ARISE WITH THEM IN PROCESSING CLAIM. AS PER THE ARS THERE ARE ALSO DISPUTES RELA TING TO PREMIUM IMPROPER DOCUMENTS ETC. WITH SUCH INSURANCE COMPAN IES. AS PER THE ARS IN ORDER TO GIVE EFFECT OF SUCH DEBIT BY THEM THE APPELLANT COMPANY HAD DEBITED GOOD HEALTH EXPENSES AND CREDITED ORIEN TAL INSURANCE CO. LTD. THIS IS ONE TYPE OF DAMAGES AND THEREFORE IS R IGHTLY CHARGED AS EXPENSE IN THE PROFIT AND LOSS ACCOUNT. AS PER THE ARS BOTH THE ABOVE TRANSACTIONS OF RS. 81 860/- AND RS. 50 000/- ARE B USINESS EXPENSES OF THE APPELLANT COMPANY. SINCE THEY ARE RELATED TO M EDICAL EXPENSES THEY ARE DEBITED IN THE ACCOUNT HEAD OF 'GOOD HEALTH EXP ENSES'. AS PER THE ARS THE EXPENSES ARE INCIDENTAL AND ANCILLARY TO T HE APPELLANT COMPANY'S BUSINESS AND ARE ALLOWABLE UNDER THE INCO ME TAX ACT 961. THESE SUBMISSIONS OF THE ARS ARE FOUND TO BE TENABL E. AS PER LD.ARS THE LD. ASSESSING OFFICER HAS NOT APPRECIATED TH E NATURE OF TRANSACTIONS AND BLINDLY DISALLOWED THE SAME. AS P ER THE ARS IN SPITE OF SUBMITTING DETAILS OF TRANSACTION BY WAY OF LEDGER ACCOUNT AND VOUCHER THE LD. OFFICER HAS DISALLOWED SAYING THE APPELLANT COMPANY HAS NOT PROPER EXPLANATION. THESE SUBMISSIONS OF ARS OF THE APPELLANT ARE TO BE TENABLE. THIS IS NOT THE CASE OF THE APPELLANT THAT PAYMENT IS NOT GENUINE. ALSO THE DETAILS WERE SUBMITTED TO THE AO AND THE AO HAS NOT BEEN ABLE TO PROVE THAT THE PAYMENTS WERE NOT FOR B USINESS PURPOSE OF THE APPELLANT. CONSIDERING THESE FACTS THE DISALLO WANCE OF RS. 1 31 860/- AS MADE BY THE AO IS HEREBY DELETED. THU S THE GROUND OF APPEAL NO.4 OF THE APPELLANT IS ALLOWED. ITA NO.1069/AHD /2014 ACIT VS. M/S.JMSL WEBSOLUTION PVT.LTD. ASST.YEAR 390 007 - 9 - 3. AGGRIEVED BY THE ORDER OF LD.CIT(A) REVENUE IS NOW IN APPEAL BEFORE US. 4. THE LD.DR SUPPORTED THE ORDER OF THE AO. 5. WE HAVE HEARD THE LD.SR.DR. WE FIND THAT IN THE INSTANT CASE THE AO HAS AGREED THAT SUBMISSIONS WERE DULY MADE AND A LL PAYMENTS CANNOT BE DOUBTED. IN OUR CONSIDERED OPINION IT IS NOT T HE DUTY OF THE DEPARTMENT TO HOLD THAT WHERE THE EXPENDITURE IS TO BE MADE. IT IS FOR THE BUSINESS-MAN TO DECIDE WHERE THE EXPENDITURE IS TO BE MADE FOR SMOOTH FUNCTIONING OF THE BUSINESS. LOOKING TO THE TOTALI TY OF THE FACTS OF THE CASE WE DO NOT FIND ANY AMBIGUITY OR IRREGULARITIE S IN THE ORDER PASSED BY THE LD.CIT(A) THE SAME IS HEREBY UPHELD. THUS GR OUNDS RAISING BY THE REVENUE IN THIS APPEAL ARE DISMISSED. 6. IN THE RESULT REVENUES APPEAL IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 04 /10/2016 SD/- SD/- .. ( ) () ( N.K. BILLAIYA ) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 04/ 10 /2016 6... .../ T.C. NAIR SR. PS ITA NO.1069/AHD /2014 ACIT VS. M/S.JMSL WEBSOLUTION PVT.LTD. ASST.YEAR 390 007 - 10 - !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 78- + 9- / CONCERNED CIT 4. + 9- ( ) / THE CIT(A)-I BARODA 5. :;<-78 .782 / DR ITAT AHMEDABAD 6. <=> / GUARD FILE. / BY ORDER (:-- //TRUE COPY// / ( DY./ASSTT.REGISTRAR) / ITAT AHMEDABAD 1. DATE OF DICTATION .. 3.10.16 (DICTATION-PAD 2- PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 3.10.16 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.4.10.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 4.10.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER