Pioneer Urban Land & Infrastructure Ltd., New Delhi v. ITO, New Delhi

ITA 183/DEL/2010 | 2004-2005
Pronouncement Date: 19-03-2010 | Result: Allowed

Appeal Details

RSA Number 18320114 RSA 2010
Bench Delhi
Appeal Number ITA 183/DEL/2010
Duration Of Justice 2 month(s) 5 day(s)
Appellant Pioneer Urban Land & Infrastructure Ltd., New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 19-03-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 19-03-2010
Date Of Final Hearing 11-03-2010
Next Hearing Date 11-03-2010
Assessment Year 2004-2005
Appeal Filed On 13-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F: NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NO. 183/DEL/2010 ASSESSMENT YEAR: 2004-05 PIONEER URBAN LAND & INFRASTRUCTURE LTD. A-22 GREEN PARK 3 RD FLOOR AUROBINDO MARG NEW DELHI. VS. ITO WARD 14(3) NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SH. ARVIND MITTAL CA RESPONDENT BY: SMT. VANDANA RAMACHANDRAN SR. DR O R D E R PER I.P. BANSAL J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS D IRECTED AGAINST THE ORDER OF CIT(A) DATED 12.11.09 FOR A.Y. 2004-05. G ROUNDS OF APPEAL READ AS UNDER: - 1. THE CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRM ING THE DISALLOWANCE OF FOREIGN TRAVELING EXPENSES OF RS. 2 88 884/- INCURRED FOR THE PURPOSE OF BUSINESS IGNORING THE F ACTS AND EVIDENCES PLACED ON RECORD. THUS THE ADDITION SO M ADE SHOULD BE DELETED. 2. THE APPELLANT CRAVES THE LEAVE TO ADD SUBSTITUT E MODIFY DELETE OR AMEND ALL OR ANY GROUND OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IS WITH RE GARD TO DISALLOWANCE MADE BY THE AO ON ACCOUNT OF FOREIGN T RAVELING EXPENSES. SH. MANISH PERIWAL MANAGING DIRECTOR OF THE ASSESS EE COMPANY HAD 2 ITA NO. 183/DEL/2010 VISITED TO SINGAPORE BANGKOK AND IT WAS CLAIMED TH AT THE EXPENSES INCURRED ON SUCH VISIT RELATED TO THE BUSINESS OF T HE ASSESSEE AND ARE LARGELY TOWARDS STUDYING THE LATEST CHANGES IN CONS TRUCTION/REAL ESTATE DEVELOPMENT AS WELL AS INTERACTION WITH LEADING INT ERNATIONAL ARCHITECTS ETC. AMONG OTHER THINGS. THE AO DID NOT ACCEPT SUC H SUBMISSION ON THE GROUND THAT NO CORROBORATING EVIDENCE WAS SUBMITTED BY THE ASSESSEE. IT IS ALSO OBSERVED BY THE AO THAT ASSESSEE DID NOT FURNISH ANY DETAIL REGARDING THE PARTICULARS THAT TO WHOM THE DIRECTOR S MET IN THE COUNTRIES HE VISITED AND WHAT WAS THE RESULT OF THE PURPORTED MEETING WITH THE PERSONS TO WHOM THE DIRECTOR OF THE COMPANY MET DUR ING HIS VISIT. THE AO ALSO OBSERVED THAT THE COUNTRIES VISITED BY THE ASSESSEE WERE POPULAR HOLI-DAY DESTINATIONS AND ASSESSEE HAS FAIL ED TO ESTABLISH THE PURPOSE OF FOREIGN VISIT THEREFORE THE EXPENSES C ANNOT BE HELD TO BE EXCLUSIVELY INCURRED FOR THE PURPOSE OF BUSINESS. IT IS IN THIS MANNER THE RETURNED INCOME OF RS. 1 25 82 880/- WAS ASSESSED A T A SUM OF RS. 1 28 71 764/- BY ADDING THE AFOREMENTIONED AMOUNT O F RS. 2 88 884/-. 3. BEFORE CIT(A) IT WAS SUBMITTED THAT ASSESSEE IS ENGAGED IN THE DEVELOPMENT OF INTEGRATED TOWNSHIP AT GURGAON BY TH E NAME OF NIRWANA COUNTRY SOUTH CITY-11 GREENWOOD CITY ETC. THE AS SESSEE WAS CONTINUED IN MARKETING AND SELLING ITS DEVELOPED AN D FORTH COMING PROJECTS AND PROPERTIES TO NON-RESIDENTS INDIAN RES IDING OUT OF INDIA DIRECTLY AS WELL AS THROUGH THEIR NETWORK BROKERS A ND ON OPENING UP OF POLICIES BY THE CENTRAL GOVERNMENT FOR SALE OF RESI DENTIAL AS WELL AS COMMERCIAL COMPLEXES TO THE ACTUAL USERS AND INVEST ORS ABROAD THUS COMPANY KEEPING IN MIND GLOBAL ECONOMIC DEVELOPMENT THE MANAGING 3 ITA NO. 183/DEL/2010 DIRECTOR MR. MANISH PERIWAL HAD VISITED SINGAPORE A ND BANGKOK TO ATTEND AND ADDRESS THE MARKETING MEET ARRANGED BY T HEIR LEADING BROKER M/S BNB PROPERTIES AND FOLLOW UP MEETINGS AND VISIT BY MR. KAMAL PERIWAL DIRECTOR OF THE COMPANY AND IT WAS SUBMITT ED THAT DUE TO THAT VISIT THE COMPANY DURING THE YEAR WAS ABLE TO SELL ONE PLOT AND THEREAFTER ALSO SOLD THE PROPERTIES TO SINGAPORE CUSTOMERS AND IT WAS SUBMITTED THAT DETAILS OF THESE SALES DURING THE ASSESSMENT Y EAR WERE ALSO SUBMITTED. IT WAS SUBMITTED THAT ALL THESE EVIDENC ES WERE SUBMITTED WITH THE AO VIDE LETTER DATED 16 TH OCTOBER 2006 AND ALL THESE FACTS ARE MENTIONED IN PARA 3.1 OF THE ORDER OF CIT(A) AND IT WAS SUBMITTED THAT DESPITE FILING ALL THESE DETAILS THE AO DID NOT APP RECIATE THE FACTS PROPERLY AND THE EXPENSES WERE INCURRED FOR THE PURPOSE OF B USINESS. THE LD. CIT(A) DID NOT AGREE WITH THE CONTENTION OF THE ASS ESSEE AND HELD THAT AO WAS RIGHT IN DISALLOWING THE EXPENDITURE. 4. IT WAS SUBMITTED BY LD. AR THAT FACTS HAVE WRONG LY BEEN APPRECIATED BY LD. AO AND CIT(A) THAT THE PURPOSE O F VISIT BY THE MANAGING DIRECTOR WAS RELATED TO BUSINESS AND ENOUG H EVIDENCE WAS FILED BEFORE AO TO SUBSTANTIATE THE SAME HE REFERR ED TO THE PAGE 5 OF THE PAPER BOOK WHERE THE EVIDENCE WAS SUBMITTED TO SUB STANTIATE THAT THESE EXPENSES WERE RELATING TO BUSINESS VIDE LETTE R DATED 16 TH OCTOBER 2006 SUBMITTED TO THE AO AND IT WAS SHOWN THAT SIX SALES WERE MADE TO THE NON RESIDENT INDIAN THE DETAIL OF WHICH IS PLAC ED AT PAGE SIX OF THE PAPER BOOK AND THUS IT WAS PLEADED THAT LD. AO AS WELL AS CIT(A) WERE WRONG IN MAKING THE DISALLOWANCE. 4 ITA NO. 183/DEL/2010 5. ON THE OTHER HAND LD. DR RELIED UPON THE ORDER OF AO AND CIT(A). 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS IN THE LIGHT OF MATERIAL PLACED BEFORE US. A LETTER DATED 16 TH OCTOBER 2006 HAS BEEN SUBMITTED TO AO A COPY OF WHICH IS PLACED AT PAGE 5 OF THE PAPER BOOK. AT PAGE 6 THE ASSESSEE HAS GIVEN THE DETAILS OF SAL ES MADE BY IT TO THE SINGAPORE CUSTOMERS. FOR THE SAKE OF CONVENIENCE TH E CONTENTS OF PAGE 5 & 6 OF THE PAPER BOOK ARE REPRODUCED BELOW: - P.K. TAPARIA & ASSOCIATES CHARTERED ACCOUNTANTS 98102-54650 INCOME TAX OFFICER WARD 14(3) NEW DELHI SUB: IN THE MATTER OF PIONEER URBAN LAND & INFRAST RUCTURE LIMITED ASSESSMENT PROCEEDINGS FOR 2004-05 SIR THIS IS WITH REFERENCE TO ABOVE AND IN CONTINUATIO N OF EARLIER HEARING IT IS HUMBLY SUBMITTED AS UNDER: 1. THE DETAILS OF MAINTENANCE EXPENSES IN LEDGER AC COUNTS. 2. COPY OF SALE DEED IN NO. 9 AS ASKED BY YOUR GOO DSELF. WE THINK ABOVE SUBMISSIONS WILL BE IN ORDER. THANKING YOU. YOURS FAITHFULLY SD/- CHARTERED ACCOUNTANTS 16.10.2006 PIONEER URBAN LAND & INFRASTRUCTURE LTD. FORMERLY PIONEER PROFIN LTD. 5 ITA NO. 183/DEL/2010 A.Y. 2004-05 (F.Y. 2003-04) ILLUSTRATIVE LIST OF BOOKINGS FROM INTERNATIONAL CU STOMERS: ___________________________________________________ _____ PARTYS NAME DATE OF PROJECT TYPE UNIT AMOUNT BOOKINGS RAJ VARGHAN 19.12.2003 NIRVANA PLOT PLOT NO. 188 40 28606 OLAM INTERNATIONAL LTD. NO. 11-02 SUNTEC TOWER II 9 TEMASEK BIVD SINGAPORE. SUNIL DHAR 23.06.04 SOUTH CITY-II HOUSE BC-0085 3640 880 65 SHELFORD ROAD SHELFORD REGENCY 01-03 SINGAPORE. PIYALI SARKAR 11.11.05 SOUTH CIETY-II FLATS 11.05.05 02 7408904 GUPTA 79 MEYER ROAD GROUP HOUSING 13-03 CASA MEY CLOSE. FORT SINGAPORE. ANOOP SINGH 14.11.2005 SOUTH CITY-II FLATS 03-15-15 03 4779023 27 BALMORAL ROAD GROUP HOUSING 16-29 BALMORAL TOWER FRESCO SINGAPORE. JOYDEEP BOSE 18.01.2007 SOUTH CITY-II FLATS 12-14-14 01 7901549 29-01 AMBER POINT GROUP HOUSING 1 AMBER ROAD FRESCO SINGAPORE. RAJEEV RAINA 27.01.2007 SOUTH CITY-II FLATS 08-16-16 02 16393953 03-03 125 MEYER GROUP HOUSING ROAD SINGAPORE. HARMONY. 7. IN THIS VIEW OF THE SITUATION THE AO WAS WRONG IN OBSERVING THAT ASSESSEE DID NOT SUBSTANTIATE THE CONTENTION THAT T HE VISIT OF THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY WAS FOR B USINESS PURPOSES AND SIMILARLY CIT(A) WAS WRONG IN REJECTING THE CLA IM OF THE ASSESSEE AND UPHOLDING THE ASSESSMENT ORDER. FROM THE FACTS IT CAN BE OBSERVED THAT THE PURPOSE OF VISIT BY THE MANAGING DIRECTOR WAS BUSINESS. THEREFORE WE SEE NO JUSTIFICATION IN DISALLOWANCE OF SUCH AMOUNT. WE DELETE THE SAME. 6 ITA NO. 183/DEL/2010 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON (R.C. SHARMA) ACCOUNTANT MEMBER (I.P. BANSAL) JUDICIAL MEMBER DATED: *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT NEW DELHI. TRUE COPY BY ORDER DEPUTY REGISTRAR