GALAXY MEDICAL DEVICES P. LTD, MUMBAI v. ITO 6(3)(1), MUMBAI

ITA 3218/MUM/2010 | 2006-2007
Pronouncement Date: 30-09-2011 | Result: Allowed

Appeal Details

RSA Number 321819914 RSA 2010
Assessee PAN NAACG3460H
Bench Mumbai
Appeal Number ITA 3218/MUM/2010
Duration Of Justice 1 year(s) 5 month(s) 7 day(s)
Appellant GALAXY MEDICAL DEVICES P. LTD, MUMBAI
Respondent ITO 6(3)(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 30-09-2011
Date Of Final Hearing 21-09-2011
Next Hearing Date 21-09-2011
Assessment Year 2006-2007
Appeal Filed On 23-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI P.M. JAGTAP ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR JUDICIAL MEMBER I.T.A. NO.3218/MUM/2010 (ASSESSMENT YEAR : 2006-07) M/S. G ALAXY MEDICAL DEVICES P. LTD. 1 PLOT NO.115 ASHIRWAD BUILDING ROAD NO.24A SION (W) MUMBAI-400 022 PAN AACG3460H VS. INCOME TAX OFFICER 6(3)(1) AAYAKAR BHAVAN MUMBAI. APPELLANT RESPONDENT. APPELLANT BY : MR. SURESH N OTWANI. RESPONDENT BY : MR. A.K. NAYAK. DATE OF HEARING : 21.09.2011. DATE OF PRONOUNCEMENT : 30-09-2011. O R D E R. PER P.M. JAGTAP A.M. : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LEARNED CIT(APPEALS)-12 MUMBAI DATED 14.1.2010 AND THE SOL ITARY ISSUE ARISING OUT OF THE SAME RELATES TO THE DISALLOWANCE MADE BY THE A.O. AND CO NFIRMED BY THE LEARNED CIT(A) ON ACCOUNT OF ASSESSEES CLAIM FOR DEDUCTION TOWARDS T RAVELLING EXPENSES. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY W HICH IS ENGAGED IN THE BUSINESS OF DEALING IN MEDICAL DEVICES. THE RETURN OF INCOME FO R THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 24.11.2006 DECLARING TOTAL INCOME OF RS.2 29 290. IN THE PROFIT AND LOSS ACCOUNT FILED ALONG WITH THE SAID RETURN A SUM OF RS.6 23 054 WAS DEBITED BY THE ASSESSEE ON ACCOUNT OF TRAVELLING EXPENSES UNDER THE HEAD BUSI NESS PROMOTION EXPENSES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS CALLED UPON BY THE A.O. AS TO SHOW 2 ITA NO.4646/MUM/2010 HOW THE SAID EXPENSES WERE INCURRED WHOLLY AND EXCL USIVELY FOR THE PURPOSE OF BUSINESS. AS MENTIONED BY THE ASSESSING OFFICER THE AUTHORIS ED REPRESENTATIVE OF THE ASSESSEE HOWEVER ACCEPTED THAT THE SAID EXPENSES WERE NOT IN CURRED FOR THE PURPOSE OF ASSESSEES BUSINESS AND THE SAME COULD BE DISALLOWED. ACCORDIN GLY DISALLOWANCE OF RS.6 23 054 WAS MADE BY THE A.O. ON ACCOUNT OF TRAVELLING EXPENSES IN THE ASSESSMENT COMPLETED U/S.143(3) VIDE AN ORDER DT.16.12.2008. 3. AGAINST THE ORDER PASSED BY THE A.O. U /S.143(3) AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LEARNED CIT(A) WHO CONFIRMED TH E DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF TRAVELLING EXPENSES FOR THE FOLLOWING R EASONS GIVEN IN PARAGRAPH 2.2 OF HIS IMPUGNED ORDER : I HAVE CONSIDERED THE SUBMISSIONS. THE APPELLANT HAS NOT BEEN ABLE TO CONCLUSIVELY PROVE THAT THE EXPENDITURE INCURRED BY IT HAS BEEN REIMBURSED BY SUPPLIER COMPANY. THE APPELLANT HAS ALSO NOT BEEN ABLE TO SHOW THAT THERE WAS AN AGREEMENT WITH THE SUPPLIER COMPANY FOR BUSINESS PR OMOTION BY THE DISTRIBUTORS. THE DOCTORS ARE NOT EMPLOYEES OR RETAILERS OF THE C OMPANY. THE CONFERENCES THAT HAVE BEEN ATTENDED BY THE DOCTORS ARE ROUTINE MEDICAL CONFERENCES ON TECHNICAL ISSUES. THERE IS NOTHING ON RECORD TO SH OW THAT THE CONFERENCES INCLUDE DISCUSSION ON THE MERITS OF THE SUPPLIER CO MPANYS PRODUCTS. IN SHORT THE ARGUMENT OF BUSINESS PROMOTION HAS NOT BEEN PRO VED WITH PHYSICAL EVIDENCE. IN ADDITION THE APPELLANT HAS AGREED AT THE TIME O F ASSESSMENT THAT THE EXPENDITURE WAS NOT FOR THE PURPOSE OF BUSINESS. T HIS IS EVIDENCED BY A NOTING IN THE ORDER SHEET DATED 8.12.2008 WHICH BEARS THE SIG NATURE OF THE AUTHORISED REPRESENTATIVE. THE DISALLOWANCE THEREFORE IS O N AN AGREED BASIS. FROM THIS POINT OF VIEW THE GROUND OF APPEAL IS NOT MAINTAIN ABLE. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A) THE A SSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH SIDES AND AL SO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LEARNED D.R. HAS SUBMITTED THAT THE DISALLOWANCE ON ACCOUNT OF TRAVELLING EXPENSES WAS MADE BY THE A.O. ON AGREED BASIS AS THE A.R. OF THE ASSESSEE HAD AGREED FOR THE SAID DISALLOWANCE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER AS HELD BY THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF R.T. BALASUBRAMANIAM VS. 3 ITA NO.4646/MUM/2010 ITO REPORTED IN 50 ITD 513 (MAD) CITED BY THE LEARN ED COUNSEL FOR THE ASSESSEE IT CANNOT BE SAID THAT THE ASSESSEE IS NOT AGGRIEVED B Y THE ORDER OF ASSESSMENT MADE BY THE A.O. ON THE BASIS OF THE AGREEMENT MADE BY THE A.R. AND CONSEQUENTLY HE CANNOT BE DENIED THE RIGHT OF VINDICATING HIS GRIEVANCE BEFORE HIGHE R FORUM. THE MAIN GRIEVANCE OF THE ASSESSEE AS SUBMITTED BY THE LEARNED COUNSEL FOR TH E ASSESSEE AT THE TIME OF HEARING BEFORE US IS THAT THE SUBMISSION MADE BY THE ASSESS EE IN WRITING VIDE LETTER DT.18.1.2010 BEFORE THE LEARNED CIT(A) JUSTIFYING ITS CLAIM FOR TRAVELLING EXPENSES HAS NOT BEEN CONSIDERED BY THE LEARNED CIT(A) WHILE DECIDING THI S ISSUE VIDE HIS IMPUGNED ORDER AS THE SAID ORDER WAS PASSED ON 14.1.2010. A COPY OF THE SAID LETTER DT.18.1.2010 FILED BEFORE THE LEARNED CIT(A) IS PLACED ON RECORD BEFORE US AND A PERUSAL OF THE SAME SHOWS THAT THE LEARNED CIT(A) HAD NO OCCASION TO CONSIDER THE SUBM ISSION MADE THEREIN IN SUPPORT OF THE ASSESSEES CASE WHILE DECIDING THE ISSUE UNDER CONS IDERATION VIDE HIS IMPUGNED ORDER WHICH WAS PASSED ON 14.1.2010. WE THEREFORE DEEM IT FA IR AND PROPER AND IN THE INTEREST OF JUSTICE TO SET ASIDE THE IMPUGNED ORDER OF THE LEAR NED CIT(A) ON THIS ISSUE AND REMIT THE MATTER BACK TO HIM FOR DECIDING THE SAME AFRESH AFT ER GIVING THE ASSESSEE ONE MORE OPPORTUNITY OF BEING HEARD. 5. IN THE RESULT THE APPEAL OF ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 3 0 TH SEPT. 2011. SD/- SD/- (R.S. PADVEKAR) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED: 30 TH SEPT. 2011. *REDDY GP 4 ITA NO.4646/MUM/2010 COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR G-BENCH. 6. GUARD FILE. (TRUE COPY ) BY ORDER ASSTT. REGISTRAR ITAT MUMBAI