Mr. Subhash M. Nargolkar,, Pune v. ITO Ward 5(1),, Pune

ITA 1551/PUN/2007 | 2003-2004
Pronouncement Date: 07-01-2011 | Result: Partly Allowed

Appeal Details

RSA Number 155124514 RSA 2007
Assessee PAN AANPN9286G
Bench Pune
Appeal Number ITA 1551/PUN/2007
Duration Of Justice 3 year(s) 1 month(s) 10 day(s)
Appellant Mr. Subhash M. Nargolkar,, Pune
Respondent ITO Ward 5(1),, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 07-01-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 07-01-2011
Assessment Year 2003-2004
Appeal Filed On 27-11-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I C SUDHIR JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER ITA NO 1551 & 1552/PN/07 (ASSTT. YEAR 2003-04 & 2004-05) SHRI SUBHASH M NARGOLKAR PUNE .. APPELLANT PAN AANPN 9286G VS. INCOME-TAX OFFICER WARD 5(1) PUNE .. RESPONDENT PAN AAACJ5786H APPELLANT BY :SMT DEEPA KHARE RESPONDENT BY :SHRI KRISHNA MURARI ORDER PER G S PANNU A.M: THE TWO CAPTIONED APPEALS ARE PREFERRED BY ASSESS EE AGAINST RESPECTIVE ORDERS OF THE COMMISSIONER OF IN COME-TAX (APPEALS)-II PUNE DATED 3.9.2007 WHICH IN TURN HAVE ARISEN FRO M ORDERS DATED 28.12.2006 PASSED BY THE ASSESSING OFFICER UNDER SE CTION 143(3) OF THE INCOME-TAX ACT 1961 (IN SHORT THE ACT) PERTAININ G TO THE ASSESSMENT YEARS 2003-04 AND 2004-05 RESPECTIVELY. 2. IN THE ASSESSMENT YEAR 2003-04 FIRST GRIEVANCE OF THE ASSESSEE IS WITH REGARD TO AN ADDITION OF RS 3 85 5 05/- SUSTAINED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) OUT OF TRAVELI NG AND INTEREST EXPENDITURE. BRIEFLY PUT ASSESSEE IS A PRACTICING GYNECOLOGIST WHO FILED HIS RETURN OF INCOME IN RESPONSE TO A NOTICE ISSUED UNDER SECTION 142(1) OF THE ACT DECLARING AN INCOME OF RS 1 02 630/-. ASSE SSEE WAS DERIVING PROFESSIONAL INCOME AS A CONSULTANT WITH INDIRA MAT ERNITY HOME A ITA NOS 1551-2/PN/07 SHRI SUBHASH M NARGOLKAR PUNE 2 PROPRIETARY CONCERN OF HIS WIFE. THE ASSESSING OFFI CER NOTED THAT ASSESSEE HAD CLAIMED TRAVELING EXPENSES OF RS 3 23 569/- AND ASSESSEE WAS ASKED TO ESTABLISH THE NEXUS OF SUCH EXPENSES WITH THE PR OFESSIONAL SERVICES RENDERED BY HIM. ASSESSEE CLAIMED THAT THE EXPENSES WERE INCURRED FOR TRAVELLING IN INDIA AND ABROAD FOR ATTENDING MEDICA L CONFERENCES AND SEMINARS IN ORDER TO BE ABREAST WITH THE LATEST DEV ELOPMENT IN MEDICAL PROFESSION. THUS IT WAS CLAIMED THAT THE EXPENSES WERE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF HIS PROFESSION A ND THE SAME WAS ALLOWABLE UNDER SECTION 37(1) OF THE ACT. THE ASSES SING OFFICER WAS NOT SATISFIED WITH THE REPLIES AND HAS OBSERVED THAT AS SESSEE HAS FAILED TO ESTABLISH THE NEXUS OF THE EXPENSES WITH THE PROFES SIONAL ACTIVITY AND IN THE ABSENCE OF RELEVANT EVIDENCE THE EXPENDITURE O F RS 3 23 569/- WAS DISALLOWED. SIMILARLY ASSESSEE HAD INCURRED INTERE ST EXPENDITURE OF RS 86 193/- ON BANK LOAN AND BANK OVER-DRAFT AND IT WA S CLAIMED THAT SUCH LOANS WERE UTILIZED FOR THE PURPOSES OF TRAVELLING. ASSESSING OFFICER DISALLOWED THE SAID EXPENDITURE ALSO ON THE GROUND THAT THE TRAVELLING EXPENSES HAVE BEEN DISALLOWED AND THEREFORE THE C LAIM OF INTEREST ON LOANS UTILIZED FOR TRAVEL ALSO DESERVES TO BE DISA LLOWED. BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS) ASSESSEE REIT ERATED THE SUBMISSIONS AND ALSO REFERRED TO VARIOUS MATERIAL A ND EVIDENCES TO SUBSTANTIATE THE PURPOSE OF TRAVEL UNDERTAKEN. THE COMMISSIONER OF INCOME-TAX (APPEALS) PARTLY ALLOWED THE CLAIM OF TH E ASSESSEE OUT OF TRAVEL EXPENSES WHILE UPHOLDING THE DISALLOWANCE OUT OF I NTEREST EXPENDITURE. ON BOTH THE COUNTS HE HAS SUSTAINED AN ADDITION OF RS 3 85 505/- OUT OF TOTAL DISALLOWANCE OF RS 4 09 762/- MADE BY THE ASS ESSING OFFICER. 3. BEFORE US THE LEARNED COUNSEL FOR ASSESSEE VEH EMENTLY POINTED OUT THAT ASSESSEE IS A GYNECOLOGIST PRACTIC ING FOR MORE THAN 35 ITA NOS 1551-2/PN/07 SHRI SUBHASH M NARGOLKAR PUNE 3 YEARS AND HE WAS UNDERTAKING CONSULTANCY ON OPD BAS IS AND ALSO CARRYING OUT SURGERY ON THE PATIENTS. IT IS POINTED OUT THAT ASSESSEE IS INVOLVED IN RESEARCH AND DEVELOPMENT AND HAS PRESEN TED PAPERS ON VARIOUS TECHNICAL SUBJECTS AT CONFERENCES IN INDIA AND ABROAD. IT IS ALSO POINTED OUT THAT HE IS AN OFFICE BEARER OF THE OBST ETRIC AND GYNECOLOGY SOCIETY OF INDIA AND THAT THE AFORESAID ACTIVITIES REQUIRE HIM TO TRAVEL INLAND AND OVERSEAS AND THE IMPUGNED EXPENDITURE HAS BEEN INCURRED IN THIS LIGHT. IT IS ALSO POINTED OUT THAT THE FOREIGN TRAV EL UNDERTAKEN IS SUPPORTED BY EVIDENCE PLACED AT PAGES 12 TO 27 OF THE PAPER B OOK AND THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS WRONGLY RE JECTED THE SAME. IT IS POINTED OUT THAT LOWER AUTHORITIES HAVE DISREGAR DED THE MATERIAL AND EVIDENCE IN ORDER TO SUSTAIN IMPUGNED DISALLOWANCES . 4. ON THE OTHER HAND LEARNED DEPARTMENTAL REPRESE NTATIVE HAS RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES IN SUPPORT OF THE CASE OF REVENUE. 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS CAREFULLY. THE INSISTENCE OF THE AUTHORITIES BELOW ON PRODUCTION O F EVIDENCE TO ALLOW THE IMPUGNED EXPENDITURE IS NOT UNJUSTIFIED. SO HOWEVER THE PLEA OF THE LOWER AUTHORITIES THAT THERE IS NO EVIDENCE TO SUBSTANTIA TE THE IMPUGNED EXPENDITURE IN OUR VIEW IS NOT REASONABLE. THE MA IN EXPENDITURE IN ISSUE RELATES TO THE TRAVEL UNDERTAKEN BY THE ASSESSEE FO R VISITING HOSPITALS AND OTHER ESTABLISHMENTS IN U K/EUROPE. IN THE PAPER BO OK ASSESSEE HAS PLACED THE RELEVANT CORRESPONDENCE WITH CERTAIN DOC TORS ABROAD AS ALSO A DETAILED TOUR REPORT MADE BY THE ASSESSEE WHICH CO NTAINS COMPLETE DETAILS OF HIS TRAVEL AND THE ACTIVITIES UNDERTAKEN DURING SUCH TRAVEL. WE FIND NO MATERIAL EXCEPT PRESUMPTIONS ON THE PART O F THE REVENUE TO DISBELIEVE THE SAID MATERIAL. QUITE CLEARLY IT IS A CASE WHERE MATERIAL ITA NOS 1551-2/PN/07 SHRI SUBHASH M NARGOLKAR PUNE 4 ADDUCED ON RECORD HAS BEEN MERELY DISBELIEVED WITHO UT ESTABLISHING ITS INGENUITY AND THEREFORE WE FIND NO REASONS TO DIS ALLOW THE TRAVELLING EXPENDITURE CLAIMED BY THE ASSESSEE. AS A CONSEQUEN CE EVEN THE INTEREST EXPENDITURE INCURRED BY THE ASSESSEE ON LO ANS UTILIZED FOR THE TRAVEL PURPOSE IS ALSO ALLOWABLE. WE THEREFORE S ET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND DIRECT ASS ESSING OFFICER TO DELETE THE DISALLOWANCE OF RS 3 85 505/- MADE OUT O F TRAVELLING AND INTEREST EXPENDITURE. 6. THE OTHER DISALLOWANCES CANVASSED BEFORE US ARE ON ACCOUNT OF MEDICINE EXPENSES TELEPHONE EXPENSES P ETROL EXPENSES HOTEL EXPENSES AND REPAIRS/MAINTENANCE AMOUNTING TO RS 12 000/- RS 6 157/- RS 4 011/- RS 15 000/- AND RS 2 266/- RES PECTIVELY. ON ALL THESE ASPECTS WE HAVE PERUSED THE IMPUGNED ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND FIND THAT THE ADDITIONS HA VE BEEN SUSTAINED ON ACCOUNT OF LACK OF EVIDENCE TO SUBSTANTIATE THE EXP ENDITURE. BEFORE US THE SAME POSITION CONTINUES AND WE FIND NO REASONS TO INTERFERE WITH THE IMPUGNED ORDER ON ANY OF THESE ASPECTS. THUS ON TH E AFORESAID ISSUES THE ASSESSEE FAILS. 7. IN THE RESULT APPEAL OF THE ASSESSEE IN ITA NO 1551/PN/07 FOR ASSESSMENT YEAR 2003-04 IS PARTLY ALLOWED AS AB OVE. 8. IN THE ASSESSMENT YEAR 2004-05 ADDITIONS IN DI SPUTE STAND ON SIMILAR FOOTING AS HAS BEEN DISCUSSED BY US IN A SSESSMENT YEAR 2003- 04. HERE ALSO THE MAJOR DISALLOWANCE IN DISPUTE IS ON ACCOUNT OF TRAVELING AND INTEREST EXPENDITURE. THE MATERIAL LED BY ASSES SEE IN SUPPORT OF THE IMPUGNED EXPENDITURE COPIES OF WHICH HAVE BEEN PLA CED IN THE PAPER BOOK AT PAGES 5 TO 22 STANDS ON A SIMILAR FOOTING AS IN THE ASSESSMENT YEAR 2003-04. THEREFORE FOR THE DETAILED REASONS G IVEN IN ASSESSMENT ITA NOS 1551-2/PN/07 SHRI SUBHASH M NARGOLKAR PUNE 5 YEAR 2003-04 WE SET ASIDE THE ORDER OF THE COMMISS IONER OF INCOME-TAX (APPEALS) AND DIRECT ASSESSING OFFICER TO DELETE TH E DISALLOWANCE OF RS 55 084/- AND RS 1 01 048/- MADE OUT OF TRAVELLING A ND INTEREST EXPENDITURE RESPECTIVELY. 9. AS REGARDS THE OTHER DISALLOWANCES ON ACCOUNT O F MEDICINE EXPENSES HOTEL EXPENSES AND REPAIRS/MAINTENANCE AM OUNTING TO RS 10 000/- RS 34 731/- AND RS 2 266/- RESPECTIVELY FOR THE REASONS GIVEN BY US IN OUR ORDER FOR ASSESSMENT YEAR 2003-04 THE ASSESSEE FAILS. 10. IN THE RESULT APPEAL OF THE ASSESSEE IN ITA NO 1 552PN/07 FOR ASSESSMENT YEAR 2004-05 IS ALSO PARTLY ALLOWED AS ABOVE. 11. RESULTANTLY BOTH THE APPEALS ARE PARTLY ALLOW ED. PRONOUNCED IN THE OPEN COURT ON THIS 7TH DAY OF JAN UARY 2011. SD/- SD /- (I C SUDHIR) (G.S. PAN NU) JUDICIAL MEMBER ACCOUNTANT ME MBER PUNE DATED: 7TH JANUARY 2011. COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT 3) THE CIT (A) II PUNE. 4) THE CIT III PUNE. 5) THE DEPARTMENTAL REPRESENTATIVE B BENCH ITAT PUNE. BY ORDER TRUE COPY ASST. REGISTRAR I.T.A.T. PUNE B . ITA NOS 1551-2/PN/07 SHRI SUBHASH M NARGOLKAR PUNE 6