Rass Intratech Pvt. Ltd, New Delhi v. ITO Ward-15 (3), New Delhi

ITA 3102/DEL/2008 | 2005-2006
Pronouncement Date: 13-01-2010 | Result: Allowed

Appeal Details

RSA Number 310220114 RSA 2008
Assessee PAN AAACR0759E
Bench Delhi
Appeal Number ITA 3102/DEL/2008
Duration Of Justice 1 year(s) 3 month(s) 3 day(s)
Appellant Rass Intratech Pvt. Ltd, New Delhi
Respondent ITO Ward-15 (3), New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 13-01-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 13-01-2010
Date Of Final Hearing 13-01-2010
Next Hearing Date 13-01-2010
Assessment Year 2005-2006
Appeal Filed On 10-10-2008
Judgment Text
ITA NO. 3102/DEL/2008 A.Y. 2005-06 1 IN THE INCOMETAX APPELATE TRIBUNAL DELHI BENCH F: NEW DELHI BEFORE SHRI C.L. SETHI JUDICIAL MEMBER & SHRI SHAMIM YAHYA ACCOUNTANT MEMBER ITA NO. 3102/DEL/2008 A.Y. : 2005-06 M/S RASS INTRATECH PVT. LTD. VS. INCOME TAX O FFICER CHEMAN ESTATE BEHIND D-4 WARD-15(3) CR BLD G. VASANT KUNJ KISHANGARH NEW DELHI NEW DELHI. (PAN: AAACR0759E) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.K. NAIR AR DEPARTMENT BY : SHRI HK LAL SR. DR O R D E R PER SHAMIM YAHYA : AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDERS OF THE LD. CIT(A) DATED 20.07.2008 PERTAINING TO ASSESSMENT YE AR 2005-06. 2. THE FIRST ISSUE RAISED IS THAT THE LD. CIT(A) ER RED IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION CLAIMED BY THE APPELLA NT COMPANY ON THE RENOVATION CARRIED OUT BY THE SAID COMPANY DURING F .Y. 2004-05 IN ESTABLISHING THE CINGARI BOUTIQUE AS THE DUTY FR EE SHOP AT THE AIRPORT. 3. IN THIS CASE THE AO NOTED THAT ASSESSE HAD SHOW N ADDITION OF RS. 30 06 794/- UNDER THE HEAD OFFICE INTERIORS I N THE SCHEDULE OF FIXED ASSETS AND HAS CLAIMED 100% DEPRECIATION UPON IT. THE AS SESSEE WAS ASKED TO PRODUCE COPY OF BILLS OF ADDITIONS. ASSESSEE SUBMI TTED THAT THE IMPUGNED EXPENSES WAS INCURRED ON TEMPORARY CONSTRUCTION BY THE COMPANY IN THE RENOVATION CARRIED OUT BY THEM IN ESTABLISHING THE DUTY FREE SHOP WHICH WAS ITA NO. 3102/DEL/2008 A.Y. 2005-06 2 RENTED BY THE ASESSEE COMPANY FROM ITDC. FOR THE SAID ADDITION IN OFFICE INTERIORS THE ASSESSEE FURNISHED A COPY OF BILL IS SUED BY M/S SKY CONTRACTORS E-4 VILLAGE AND POST OFFICE HAUZ KHAS NEW DELHI- 110016. FOR THE VERIFICATION OF THE GENUINENESS OF THE BILL THE AO ISSUED SUMMON U/S 131 OF THE IT ACT. THE AO DISALLOWED THE ENTIRE CLAIM OF AFORESAID EXPENDITURE ON THE GROUNDS THAT INVOICE IS A COMPUTER PRINTOUT COST O F RENOVATION DESIGNING AND COST OF CONSTRUCTION HAS NOT TRIFURCATED TDS CERTI FICATE EVIDENCING TAX DEDUCTION HAS NOT BEEN SUBMITTED AND NO ONE APPEARE D BEFORE AO. 4. UPON ASSESSEES APPEAL LD. CIT(A) CONFIRMED THE ADDITION HOLDING THAT DURING THE COURSE OF APPELLATE PROCEEDINGS ALSO ASS ESSEE COULD NOT BRING OUT ANY OTHER MATERIAL OR EVIDENCE TO SUBSTANTIATE THE CLAIM OF THE ASSESSEE. 5. AGAINST THIS ORDER THE ASESSEE IS IN APPEAL BEFO RE US. 6. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. WE FIND THAT IT IS THE CLAIM OF THE ASSESSEE THAT ASSESEE H AS ENTERED INTO AN AGREEMENT WITH ITDC LTD. WHEREIN THE COMPANY WAS ALLOTTED 47. 88 SQMTRS. FOR OPENING OF DUTY FREE SHOP NAMELY CINGARI BOUTIQUE AT THE INT ERNATIONAL AIRPORT AT NEW DELHI. ITDC LTD. HAS BEEN GIVEN THE POWER BY THE AIRPORT AUTHORITIES OF INDIA TO ALLOT SPACE FOR THE DUTY FREE SHOP TO VARIOUS VE NDORS AND INTERIOR WORKS IN THE AREA WAS TO BE DONE BY THE RESPECTIVE ALLOTTEES IN ACCORDANCE WITH THE DESIGNS STANDARD APPROVED BY THE ITDC. IT WAS IN THIS CONNECTION THAT ASSESSEE HAD INCURRED THE EXPENDITURE ON INTERIORS WORK WHICH WAS DONE BY M/S SKY CONTRACTS. THE CASE OF THE REVENUE IS THA T THE BILLS SUBMITTED BY THE ASSESSEE WAS NOT A PROPER BILL AND ONLY A COMPUTER PRINT OUT. IT HAS ALSO BEEN CLAIMED THAT SUMMONS WAS ISSUED TO M/S SKY CONTRAC TS BUT NOBODY ATTENDED. ANOTHER CASE IS THAT TDS CERTIFICATES E TC. HAVE NOT BEEN SUBMITTED. WE FIND THAT THIS IS NOT THE CASE THAT ACTUALLY NO WORK HAS BEEN DONE. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED PAPER BOOK BEFORE US IN WHICH PHOTOGRAPHS OF THE SHOP AND THE INTERIORS HAS ALSO BEEN SUBMITT ED. UNDER THE CIRCUMSTANCES WHEN THE FACT THAT ACTUAL WORK ON IN TERIORS HAS BEEN DONE OR ITA NO. 3102/DEL/2008 A.Y. 2005-06 3 NOT HAS NOT BEEN GONE INTO BY THE REVENUE AUTHORIT IES IN OUR CONSIDERED OPINION IT WILL NOT BE APPROPRIATE TO DISALLOW TH E ENTIRE CLAIM OF THE ASSESSEE. ACCORDINGLY IN THE INTEREST OF JUSTICE WE REMIT T HIS ISSUE TO THE FILES OF THE AO TO EXAMINE THE SAME AFRESH. ASSESSEE IS ALSO DIREC TED TO PROVIDE THE NECESSARY COOPERATION. 7. NEXT ISSUE RAISED IS THAT THE LD. CIT(A) ERRED I N CONFIRMING DISALLOWANCE OF 40% OF BUSINESS PROMOTION EXPENSES OF RS. 10 26 229/-. 8. IN THIS CASE AO NOTED THAT THE ASSESSEE HAS CL AIMED BUSINESS PROMOTION EXPENSES OF RS. 10 34 328/- FOR THE HEAD OFFICE OF THE ASSESSEE COMPANY. MOST OF THE PAYMENTS OF THESE EXPENSES AR E THROUGH THE CREDIT CARDS OF THE DIRECTORS OF THE ASSESSEE COMPANY. THE ASSE SSEE WAS REQUIRED TO PRODUCE THE BILLS OF THESE EXPENSES. DESPITE ENOU GH OPPORTUNITIES THE ASSESSEE DID NOT PRODUCE A SINGLE BILL FOR THE SAI D BUSINESS PROMOTION EXPENSES. IN THE ABSENCE OF ANY VERIFICATION FROM THE ORIGINAL BILLS 40% OF THESE EXPENSES ARE TREATED AS PERSONAL EXPENSES OF THE DIRECTORS WHICH ARE DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSE SSEE. THE TOTAL DISALLOWANCE UNDER THIS HEAD COMES OUT TO RS. 4 13 731/-. 9. UPON ASSESSEES APPEAL LD. CIT(A) CONFIRMED THE ADDITION. 10. BEFORE US LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE EXPENDITURE WAS INCURRED THROUGH CREDIT CREDITS. HE CLAIMED T HAT IN SOME CASES THE ACTUAL BILLS WERE NOT AVAILABLE BUT THE AMOUNT OF EXPEND ITURE AND THE PARTICULARS THEREOF WERE DULY REFLECTED IN THE CREDIT CARDS ST ATEMENT WHICH WAS SUBMITTED BEFORE THE AUTHORITIES BELOW. HE PRAYED THAT AN OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE BEFORE THE LOWER AUTHORITIES TO SUBSTA NTIATE THE CLAIM. 11. WE HAVE ALSO HEARD THE LD. DR AND PERUSED THE RECORDS. WE FIND THAT 40% DISALLOWANCE IN THIS REGARD HAS BEEN DONE ON A DHOC BASIS ON THE GROUND THAT ORIGINAL BILLS IN THIS REGARD HAS NOT BEEN PRO DUCED. IT IS THE CLAIM OF THE ITA NO. 3102/DEL/2008 A.Y. 2005-06 4 ASSESSEE THAT MOST OF THE EXPENSES WERE INCURRED THROUGH THE CREDIT CARDS AND THE NATURE OF EXPENDITURE WAS DULY REFLECTED IN THE CREDIT CARD STATEMENTS. IN THIS REGARD IN OUR CONSIDERED OPINION IT WILL BE APPROPRIATE TO REMIT THE MATTER TO THE FILES OF THE AO TO EXAMINE THE SAME A FRESH. NEEDLESS TO ADD THAT THE ASSESSEE MAY BE GIVEN ADEQUATE OPPORTUNITY OF B EING HEARD. 12. THE NEXT ISSUE RAISED PERTAINS TO DISALLOWANCE OF RS. 4 07 691/- OUT OF TRAVELLING EXPENSES. 13. ON THIS ISSUE AO NOTED THAT THE ASSESSEE HAS CLAIMED TRAVELLING EXPENSES OF RS. 20 35 453/- DURING THE YEAR UNDER C ONSIDERATION. THIS INCLUDES THE FOREIGN TRAVELS OF THE DIRECTORS OF TH E COMPANY AND ALSO THAT OF OTHERS. THE BILLS FOR THESE EXPENSES WERE NOT PRO DUCED FOR VERIFICATION. IN THE ABSENCE OF ANY VERIFICATION FROM THE ORIGINAL BILLS 20% OF THESE EXPENSES ARE TREATED AS BOGUS EXPENSES WHICH ARE DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSESSEE. THE TOTAL DISALLOWANCE UNDER THIS HEAD COMES OUT TO RS. 4 07 091/-. 14. UPON ASSESSEES APPEAL LD. CIT(A) CONFIRMED TH E ADDITION HOLDING THAT ASSESSEE DID NOT PRODUCE ANY EVIDENCE REGARDING TH E JUSTIFICATION OF FOREIGN TOURS AND PROPER BILLS OF THE TRAVELLING EXPENSES. 15. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BE FORE US. 16. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS DULY MAINTAINED PROPER VOUCHERS FOR TRAVELLING EXPENSES. HE CLAIMED THAT THE SAME WERE ALSO ATTACHED IN THE PAPER BOOK SUBMITTED BEF ORE US. LD. COUNSEL PLEADED THAT AS A RESULT OF THE FOREIGN TRAVELS EXP ENDITURES THE ASSESSEE HAS ALSO GAINED ADDITIONAL REVENUE INCOME. HENCE HE CL AIMED THE ADHOC DISALLOWANCE ON ACCOUNT OF NON-PRODUCTION OF BILLS IS UNWARRANTED. 17. WE HAVE ALSO HEARD THE LD. DR AND PERUSED THE RECORDS. WE FIND THAT AOS CASE IN THIS REGARD IS THAT NO BILL FOR TRAVEL LING EXPENSES HAS BEEN ITA NO. 3102/DEL/2008 A.Y. 2005-06 5 PRODUCED. LD. CIT(A) IS HOLDING THAT ASSESSE HAS N OT PRODUCED ANY EVIDENCE REGARDING THE JUSTIFICATION OF FOREIGN TRAVELS AND PROPER BILLS OF TRAVELLING EXPENSES. ON THE OTHER HAND THE LD. COUNSEL OF TH E ASSESSEE IS SUBMITTING THAT ALL THE NECESSARY BILLS AND DETAILS ARE AVAIL ABLE. UNDER THE CIRCUMSTANCES IN THE INTEREST OF JUSTICE WE REMIT THIS ISSUE TO THE FILES OF THE AO TO EXAMINE THE SAME AFRESH. NEEDLESS TO ADD THAT THE ASSESS EE SHOULD BE GIVEN ADEQUATE OPPORTUNITY OF BEING HEARD. 18. IN THE RESULT THE ASSESSES APPEAL IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13/01/2010 UP ON CONCLUSION OF THE HEARING. SD/- SD/- [C.L. SETHI] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 13/01/ 2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES