M/s. Super Delicacies (P) Ltd, New Delhi v. ACIT, New Delhi

ITA 3272/DEL/2009 | 2003-2004
Pronouncement Date: 07-01-2010 | Result: Allowed

Appeal Details

RSA Number 327220114 RSA 2009
Bench Delhi
Appeal Number ITA 3272/DEL/2009
Duration Of Justice 5 month(s) 18 day(s)
Appellant M/s. Super Delicacies (P) Ltd, New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 07-01-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 07-01-2010
Date Of Final Hearing 07-01-2010
Next Hearing Date 07-01-2010
Assessment Year 2003-2004
Appeal Filed On 20-07-2009
Judgment Text
ITA NO. 3272&3273/DEL/2009 A.Y. 2003-04&2006-07 1 IN THE INCOMETAX APPELATE TRIBUNAL DELHI BENCH G: NEW DELHI BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER & SHRI SHAMIM YAHYA ACCOUNTANT MEMBER ITA NO. 3272&3273/DEL/ 2009 A.Y. : 2003-04&2006-07 M/S SUPER DELICACIES PRIVATE LIMITED VS. ACI T CENTRAL CIRCLE-25 C/O VINOD KUMAR BINDAL & CO. NEW DELHI CHARTERED ACCOUNTANTS SHIV SUSHIL BHAVAN D-219 VIVEK VIHAR PHASE-I NEW DELHI 110 095 (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SANJEEV BINDAL CA DEPARTMENT BY : SH. GAJANAND MEENA CIT(DR) O R D E R PER SHAMIM YAHYA: AM THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST RESPECTIVE ORDERS OF THE LD. CIT(A) PERTAINING TO ASSESSMENT YEAR 2003-04 & 2006-07. 2. THE COMMON ISSUE RAISED IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION WITH REGARD TO FOREIGN TRAV ELLING EXPENSES. 3. IN THIS CASE IN THE ASSESSMENT YEAR 2003-04 THE AO OBSERVED THAT THE ASSESSEE HAS CLAIMED A SUM OF RS. 7.95 LA KHS TOWARDS TRAVELLING WHICH IS QUITE HIGH AS COMPARED TO RS. 1 .89 LAKHS IN THE EARLIER YEAR. AO NOTED THAT THE DIRECTORS HAVE T RAVELLED ABROAD DURING THE YEAR. HE HELD THAT IT IS COMMON THAT SOME ELEMENT OF ITA NO. 3272&3273/DEL/2009 A.Y. 2003-04&2006-07 2 PERSONAL EXPENDITURE IS PART OF SUCH CLAIM. FURTHER THE DIRECTORS BEING DIRECTORS IN OTHER COMPANIES THE ENTIRE EXP ENDITURE ON FOREIGN TRAVEL SHOULD NOT HAVE BEEN BOOKED IN THE A CCOUNTS OF THE COMPANY. HENCE 25% OF THE TOTAL EXPENDITURE BOOKE D IS DISALLOWED AS BEING PERSONAL PARTLY AND ALSO AS PARTLY NOT REL ATING TO COMPANYS BUSINESS. HENCE A SUM OF RS. 1 98 750/ - IS DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSE SSEE. 4.1. ON THE ABOVE SAID ANALOGY ADDITION OF DISALLOW ANCE OF 25% AMOUNTING TO RS. 2 11 000/- WAS MADE FOR ASSESSMENT YEAR 2006- 07. 5. ASSESSEE IN ITS APPEAL BEFORE THE LD. CIT(A) SUB MITTED THAT COMPLETE DETAILS OF DIRECTORS TRAVELLING EXPENSES W ERE PRODUCED FOR VERIFICATION. THE AO DID NOT FIND ANY DEFECT THER EIN. IT WAS ALSO SUBMITTED THAT THERE CANNOT BE ANY ELEMENT OF PERSO NAL EXPENSE IN THE CASE OF THE COMPANY. UPON CONSIDERATION OF THE SAME LD. CIT(A) HELD THAT THOUGH NO DISALLOWANCE CAN BE MADE FOR ANY PERSONAL USE INCLUDED IN THE CASE OF THE ASSESSEE C OMPANY THE POSSIBILITY THAT BUSINESS OF OTHER CONCERNS WHERE T HE DIRECTORS WERE INTERESTED WAS ALSO CONDUCTED DURING THE SAID FORE IGN TRAVELS CANNOT BE COMPLETELY RULED-OUT. THEREFORE HE REST RICT THE DISALLOWANCE TO 5% AND SUSTAINED THE ADDITION OF RS . 39 750/- FOR ASSESSMENT YEAR 2003-04 AND RS. 42 200/- FOR ASSESS MENT YEAR 2006-07 RESPECTIVELY. 6. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BEF ORE US. ITA NO. 3272&3273/DEL/2009 A.Y. 2003-04&2006-07 3 7. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. WE FIND THAT ADDITION HAS BEEN MADE WITHOUT ANY CO GENT BASIS. IT IS NOT THE CASE THAT EXPENDITURE HAS ACTUALLY NOT B EEN INCURRED OR THAT THE EXPENDITURE WAS UTILIZED FOR NON-BUSINESS PURPOSES. IT IS TOTALLY MADE ON THE BASIS OF SURMISES AND CONJECTUR ES. THE REVENUE AUTHORITIES HAVE GUESSED THAT DIRECTORS MIGHT HAVE CONDUCTED BUSINESS OF OTHER COMPANIES WITHOUT ANY BASIS. I T IS NOT THE CASE THAT THEY HAVE COME-ACROSS WITH SUCH DOCUMENT OR IN FORMATION. IT IS SETTLED LAW THAT ADDITION CANNOT BE MADE ON SURM ISES AND CONJECTURES. UNDER THE CIRCUMSTANCES WE DO NOT FI ND ANY REASON TO SUSTAIN THE ADDITION. AS SUCH WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION. 8. IN THE RESULT BOTH THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/01/2010. SD/- SD/- [RAJPAL YADAV] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE:07/01/ 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