ITO 19(3)(4), MUMBAI v. TRIOS, MUMBAI

ITA 4082/MUM/2009 | 2005-2006
Pronouncement Date: 10-12-2010 | Result: Partly Allowed

Appeal Details

RSA Number 408219914 RSA 2009
Assessee PAN AACFT4028M
Bench Mumbai
Appeal Number ITA 4082/MUM/2009
Duration Of Justice 1 year(s) 5 month(s) 8 day(s)
Appellant ITO 19(3)(4), MUMBAI
Respondent TRIOS, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 10-12-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted E
Tribunal Order Date 10-12-2010
Date Of Final Hearing 30-11-2010
Next Hearing Date 30-11-2010
Assessment Year 2005-2006
Appeal Filed On 02-07-2009
Judgment Text
1 ITA 4082/MUM/09 M/S TRIOS IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E BEFORE SHRI P.M. JAGTAP A.M. AND SHRI V. DURGA RAO JM ITA NO. 4082/MUM/09 ASSESSMENT YEAR 2005-06 INCOME TAX OFFICER -19(3)(4) R. NO. 304 3 RD FLOOR PIRAMAL CHAMBERS LALBAUG MUMBAI 400 012. VS. M/S TRIOS SHOP NO. 2 ADHESIR HOUSE 49 HILL ROAD BANDRA (W) MUMBAI . 50 PAN AACFT 4028M APPELLANT RESPONDENT APPELLANT BY SHRI SHISHIR SRIVAS TAVA RESPONDENT BY SHRI MEHUL SHAH ORDER PER P.M. JAGTAP A.M. THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A) XIX MUMBAI DATED 17.04.2009. 2. IN GROUND NO. 1 THE REVENUE IS CHALLENGED THE A CTION OF THE LD. CIT(A) IN DELETING THE DISALLOWANCE OF ` 8 10 000/- MADE BY THE A.O. ON ACCOUNT OF SALARY EXPENSES. 3. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHI P FIRM WHICH IS ENGAGED IN THE BUSINESS OF DEALING IN CHILDREN WEAR READYMADE GAR MENTS WESTERN OUTFITS ETC. ON RETAIL BASIS. THE RETURN OF INCOME FOR THE YEAR UNDER CON SIDERATION WAS FILED BY IT ON 31.10.2005 DECLARING TOTAL INCOME OF ` 1 25 037/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS CALLED UPON BY THE A. O. TO FURNISH THE DETAILS OF SALARY EXPENSES CLAIMED BY IT IN THE YEAR UNDER CONSIDERAT ION WHICH WERE FOUND TO BE HIGHER THAN THE IMMEDIATELY PRECEDING YEAR. THE ASSESSEE HOWEVER DID NOT FURNISH THE DETAILS 2 ITA 4082/MUM/09 M/S TRIOS REQUIRED BY THE A.O. ON THE GROUND THAT ITS SALARY REGISTER WAS MISPLACED. FROM THE INFORMATION DIRECTLY OBTAINED FROM DY. DIRECTOR OF ESIC AND REGIONAL PROVIDENT COMMISSIONER THE A.O. CAME TO KNOW THAT THE ASSESS EE IS NOT COVERED BY ESIC AND P.F. ACCORDING TO HIM THIS INFORMATION WAS SUFFICIENT T O INDICATE THAT THE NUMBER OF EMPLOYEES WORKING WITH THE ASSESSEE WAS LESS THAN T WENTY. IN THIS REGARD IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE THAT IT IS RUNN ING A DEPARTMENTAL STORE WITH GROUND PLUS TWO FLOORS HAVING DIFFERENT COUNTERS FOR BOYS GIRLS NEW BORN BABY LADIES & GENTS ETC. FOR EACH OF WHICH FOUR TO FIVE EMPLOYEES WERE REQUIRED. IT WAS ALSO SUBMITTED BY THE ASSESSEE FIRM THAT ITS SALES HAVE INCREASED BY 70% IN THE YEAR UNDER CONSIDERATION AS COMPARED TO THE IMMEDIATELY PRECEDING YEAR AND GOIN G BY THIS INCREASE IN SALES ITS CLAIM FOR SALARY EXPENSES OF ` 18.84 LACS WAS QUITE REASONABLE. THESE SUBMISSIONS OF THE ASSESSEE WERE NOT FOUND TENABLE BY THE A.O. ACCORD ING TO HIM THE FACT THAT THE ASSESSEE FIRM WAS NOT COVERED BY ESIC AND PF CLEARLY INDICAT ED THAT IT WAS NOT HAVING MORE THAN TWENTY EMPLOYEES. HE ALSO NOTED THAT THE ASSESSEE HAS FAILED TO PRODUCE SALARY REGISTER OR ANY OTHER EVIDENCE TO SUPPORT AND SUBSTANTIATE ITS CLAIM FOR HIGHER SALARY EXPENDITURE INCURRED IN THE YEAR UNDER CONSIDERATION AS COMPARE D TO THE IMMEDIATELY PRECEDING YEAR. ACCORDING TO HIM THE INCREASE IN TURNOVER OF THE A SSESSEE COULD BE ATTRIBUTABLE TO QUALITATIVE INCREASE IN TURNOVER AND NOT NECESSARIL Y QUANTITATIVE INCREASE. HE THEREFORE ALLOWED THE CLAIM OF THE ASSESSEE FOR SALARY EXPEND ITURE ON ESTIMATED BASIS AT ` 11 35 500/- BY ALLOWING AN INCREASE OF 25% IN THE A NNUAL SALARY OF ` 9 08 400/- ADOPTED ON THE BASIS OF SALARY PAID BY THE ASSESSEE FOR THE MONTH OF MARCH 2003 AS PER SALARY REGISTER. ACCORDINGLY THE SALARY EXPENDITURE OF ` 7 48 500/- WAS DISALLOWED BY HIM TREATING THE SAME TO BE UNVERIFIABLE. ON SIMILAR B ASIS THE BONUS PAID BY THE ASSESSEE WAS ALSO DISALLOWED BY HIM TO THE EXTENT OF ` 62 375/- MAKING THE TOTAL DISALLOWANCE ON THIS ISSUE AT ` 8 10 000/-. 4. THE DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF SALARY AND BONUS WAS CHALLENGED BY THE ASSESSEE IN AN APPEAL FILED BEFOR E THE LD. CIT(A) AND AFTER CONSIDERING THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE BEFO RE HIM THE LD. CIT(A) DELETED THE 3 ITA 4082/MUM/09 M/S TRIOS SAID DISALLOWANCE MADE BY THE A.O. FOR THE FOLLOWIN G REASONS GIVEN IN PARA NO. 3.2 AND 3.3 OF HIS IMPUGNED ORDER: I HAVE PERUSED THE ASSESSMENT ORDER AND THE WRITT EN SUBMISSIONS FILED BY THE APPELLANT. THE A.O. HAS DISALLOWED PART OF THE SALARY SIMPLY BECAUSE THE APPELLANT WAS NOT REGISTERED UNDER ESIC AND PF AND SO HE ASSUMED THAT THE EMPLOYEES IN THE APPELLANT FIRM WERE LESS THAN 20. THE SAME IS NOT PROPER AS NON- COMPLIANCE OR NON-REGISTRATION UNDER THE RESPECTIVE ACTS LEAD TO PENAL ACTION UNDER THOSE ACTS IF BROUGHT TO THEIR NOTICE BUT THAT WILL NOT IPSO FACTO LEAD TO THE CONCLUSION THAT THE APPELLANT IS NECESSARILY HAVING LESS THAN 20 EMPLOYEES. THUS THE LETTER FROM THE PF OFFICE IS NOT A CONCLUSIVE PROOF OF NUMBER O F EMPLOYEES WITH THE APPELLANT FIRM. IN THIS CASE SURVEY U/S 133A OF THE ACT WAS CONDUCTED AND IT BEING A ON THE SPOT ENQUIRY HAD THE EMPLOYEES BEEN LESS THAN 20 THE SAME COULD HAVE BEEN CHECKED ON THE SPOT AND THE APPELLANT QUESTIONED. NO SUCH EVIDENCE OR MATERIAL HAS BEEN POINTED OUT IN THE ASSESSMENT ORDER. THE A.O. COULD HAVE ASKED THE APPELLANT TO PRODUCE THE EMPLOYEES OR COULD HAVE ENQUIRED DIR ECTLY AFTER ASCERTAINING THEIR ADDRESSES IF HE HAD DOUBTS OF INFLATION OF SALARY E XPENDITURE. IT IS FURTHER OBSERVED THAT THE APPELLANTS TURNOV ER WHICH WAS ` 1.97 CRORES IN A.Y. 2004-05 JUMPED TO ` 3.32 CRORES THIS YEAR WHICH IS HIGHER BY 70%. TH E ELECTRICITY EXPENSES INCREASED FROM ` 9.41 LAKHS TO ` 14.48 LAKHS WHICH IS HIGHER BY 54%.WHILE THE SALARY INCREASED IS FROM ` 16.17 LAKHS TO ` 20.41 LAKHS WHICH IS HIGHER ONLY BY 20%. IF THE TURNOVER HAS GONE UP BY 70% SUCH INCREASE IN SALARY EXPENDITURE IS QUITE NATURAL AS THE APPELLANT IS I N THE BUSINESS OF RETAIL DEALING IN GARMENTS AND NEEDS EMPLOYEES TO MAN ITS COUNTERS. T HE FACT THAT THE ACCOUNTS OF THE APPELLANT ARE AUDITED UNDER SECTION 44AB ALSO STREN GTHENS ITS CASE. TAKING ALL THE ABOVE FACTS AND CIRCUMSTANCES AND MATERIAL FROM REC ORD IT IS HELD THAT THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING SALARY TO THE EXTENT OF ` 8 10 000/- IS WITHOUT ANY BASIS AND IS THEREFORE DELETED. 5. THE LEARNED D.R. SUBMITTED THAT THE ASSESSEE COU LD NOT SUBSTANTIATE ITS CLAIM FOR HIGHER SALARY EXPENSES CLAIMED TO BE INCURRED IN TH E YEAR UNDER CONSIDERATION DESPITE SUFFICIENT OPPORTUNITY GIVEN BY THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HE SUBMITTED THAT IT WAS ALSO GATHERED BY THE A.O. FROM THE INFORMATION COLLECTED BY HIM THAT THE ASSESSEE WAS NOT COVERED EITHER UNDER ESIC OR PF INDICATING THAT LESS THAN TWENTY EMPLOYEES WERE WORKING WITH IT. HE CONTENDED THAT THE CLAIM OF THE ASSESSEE FOR SALARY EXPENDITURE THUS WAS NOT FULLY VERIFIABLE AND THE A .O. HAD NO OPTION BUT TO ALLOW THE SAME ON ESTIMATED BASIS BY TAKING INTO CONSIDERATIO N ALL THE FACTS OF THE CASE. HE CONTENDED THAT THE ESTIMATE SO MADE BY THE A.O. BY ALLOWING 25% INCREASE IN THE SALARY EXPENDITURE THAN WHAT WAS WORKED OUT BY HIM ON THE BASIS OF SALARY PAID FOR MARCH 2003 AS PER THE SALARY REGISTER. WAS QUITE FAIR AND REAS ONABLE AND THE LD. CIT(A) WAS NOT 4 ITA 4082/MUM/09 M/S TRIOS JUSTIFIED IN ALLOWING THE ENTIRE EXPENDITURE CLAIME D BY THE ASSESSEE ON ACCOUNT OF SALARY BY MERELY ACCEPTING THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE WITHOUT THERE BEING ANY EVIDENCE TO SUPPORT AND SUBSTANTIATE THE SAME. 6. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTH ER HAND SUBMITTED THAT THE SALARY REGISTER AND OTHER EVIDENCE TO JUSTIFY THE SALARY E XPENDITURE COULD NOT BE PRODUCED BY THE ASSESSEE AS THE SAME MUST HAVE IMPOUNDED BY THE DEP ARTMENT DURING THE COURSE OF SURVEY. HE SUBMITTED THAT EVEN IN THE ABSENCE OF A NY SUCH EVIDENCE THE REASONABILITY OF THE ASSESSEES CLAIM FOR SALARY EXPENDITURE SHOULD HAVE BEEN ASCERTAINED BY THE A.O. TAKING INTO CONSIDERATION THE RELEVANT FACTS OF THE CASE INCLUDING THE FACT THAT THERE WAS AN INCREASE OF 70% IN THE TURNOVER OF THE ASSESSEE IN THE YEAR UNDER CONSIDERATION. HE SUBMITTED THAT MORE THAN TWENTY EMPLOYEES WERE WORK ING WITH THE ASSESSEE FIRM DURING THE YEAR UNDER CONSIDERATION AS EXPLAINED BY IT BEF ORE THE A.O. AND THIS CLAIM OF THE ASSESSEE CANNOT BE DISLODGED MERELY BECAUSE IT WAS NOT COVERED UNDER ESIC OR PF. HE CONTENDED THAT THE LD. CIT(A) APPRECIATED THE STAND OF THE ASSESSEE ON THIS ISSUE IN THE RIGHT PERSPECTIVE AND ALLOWED THE ENTIRE SALARY EXP ENDITURE CLAIMED BY IT SINCE HE FOUND THE SAME TO BE FAIR AND REASONABLE IN THE FACTS OF THE CASE. HE URGED THAT THE RELIEF ALLOWED BY THE LD. CIT(A) TO THE ASSESSEE ON THIS I SSUE THEREFORE DESERVES TO BE CONFIRMED. 7. IN THE REJOINDER THE LEARNED D.R. SUBMITTED THA T THE ASSESSEE WAS ALLOWED BY THE A.O. AN OPPORTUNITY TO OBTAIN THE COPIES OF MATERIA L IMPOUNDED DURING THE COURSE OF SURVEY AND DESPITE THIS OPPORTUNITY THE ASSESSEE C OULD NOT PRODUCE THE DOCUMENTARY EVIDENCE CLAIMED TO BE IMPOUNDED IN THE SURVEY TO S UPPORT AND SUBSTANTIATE ITS CLAIM FOR HIGHER SALARY EXPENDITURE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT THE EXPENDITURE CLAI MED BY THE ASSESSEE ON SALARY DURING THE 5 ITA 4082/MUM/09 M/S TRIOS YEAR UNDER CONSIDERATION WAS HIGHER THAN THE SALARY EXPENDITURE INCURRED BY IT IN THE EARLIER YEAR. THE A.O. THEREFORE REQUIRED THE AS SESSEE TO JUSTIFY THE SALARY EXPENDITURE CLAIMED IN THE YEAR UNDER CONSIDERATION BY FURNISHI NG THE REQUIRED DETAILS. THE ASSESSEE HOWEVER FAILED TO FURNISH THE SAID DETAILS. THE A .O. ALSO FOUND FROM THE ENQUIRY MADE BY HIM THAT THE ASSESSEE WAS NOT COVERED BY ESIC AN D PF. THE A.O. ALSO DID NOT FIND THE EXPLANATION OFFERED BY THE ASSESSEE JUSTIFYING ITS CLAIM FOR HIGHER SALARY PAID IN THE YEAR UNDER CONSIDERATION ON THE BASIS OF INCREASE IN THE TURNOVER AND PROCEEDED TO ESTIMATE THE SALARY EXPENDITURE ALLOWABLE TO THE ASSESSEE AT ` 11 35 500/- ALLOWING AN INCREASE OF 25% ON THE ANNUAL PAYMENT OF SALARY OF ` 9 08 400/- WHICH WAS ADOPTED BY HIM BY TAKING THE SALARY PAID FOR THE MONTH OF MARCH 2004 ON THE BAS IS OF SALARY REGISTER. THE A.O. THUS DISALLOWED THE SALARY EXPENDITURE OF ` 7 48 500/- AND FURTHER A SUM OF ` 62 365/- ON ACCOUNT OF BONUS. THE LD. CIT(A) HOWEVER DELETED THE SAID DISALLOWANCE ON THE GROUND THAT TOTAL EXPENSES OF ` 20.41 LACS ON ACCOUNT OF SALARY AND BONUS WERE QUI TE FAIR AND REASONABLE IN THE FACTS OF THE CASE. IT IS NO DOUB T TRUE THAT THE ASSESSEE COULD NOT FURNISH THE RELEVANT DETAILS REQUIRED BY THE A.O. OR COULD NOT FILE SALARY REGISTER TO SUPPORT AND SUBSTANTIATE ITS CLAIM FOR SALARY EXPENSES. HOWEVE R AS RIGHTLY CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESSEE EVEN IN THE ABSENCE OF SU CH EVIDENCE THE REASONABILITY OF SALARY EXPENSES CLAIMED BY THE ASSESSEE SHOULD HAVE BEEN A SCERTAINED BY THE A.O. TAKING INTO CONSIDERATION ALL THE RELEVANT FACTS OF THE CASE. AS NOTED BY THE LD. CIT(A) IN THIS REGARD THE SALARY EXPENSES WERE CLAIMED BY THE ASSESSEE TO THE EXTENT OF ` 20.41 LACS IN THE YEAR UNDER CONSIDERATION AS AGAINST ` 16.17 LACS CLAIMED IN A.Y. 2004-05 SHOWING AN INCR EASE OF ABOUT 20%. AS AGAINST THIS INCREASE IN SALARY T HERE WAS AN INCREASE OF MORE THAN 70% IN THE TURNOVER OF THE ASSESSEE IN THE YEAR UNDER C ONSIDERATION AND EVEN THE OTHER EXPENSES CLAIMED BY THE ASSESSEE SUCH AS ELECTRICIT Y ETC. WERE ON THE HIGHER SIDE. KEEPING IN VIEW OF THIS INCREASE IN THE TURNOVER OF THE ASSESSEE AS WELL AS TAKING INTO CONSIDERATION THE NORMAL ANNUAL INCREASE IN THE SAL ARY WHICH HAPPENS IN THE ROUTINE COURSE WE ARE OF THE VIEW THAT THE INCREASE IN SAL ARY OF ABOUT 20% SHOWN BY THE ASSESSEE COULD NOT BE REGARDED AS EXCESSIVE OR UNREASONABLE WARRANTING ANY DISALLOWANCE ON THIS ISSUE. THE LD. CIT(A) IN OUR OPINION THEREFORE W AS QUITE JUSTIFIED IN DELETING THE 6 ITA 4082/MUM/09 M/S TRIOS DISALLOWANCE MADE BY THE A.O. OUT OF SALARY EXPENSE S AND UPHOLDING HIS IMPUGNED ORDER ON THIS ISSUE WE DISMISS GROUND NO. 1 OF REVENUES APPEAL. 9. IN GROUND NO. 2 THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(A) IN DELETING THE DISALLOWANCE OF ` 2 30 024/- MADE BY THE A.O. ON ACCOUNT OF FOREIGN TRAVEL EXPENSES. FROM THE RELEVANT DETAILS FURNISHED BY TH E ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTICED BY THE A.O. THAT THE ASSESSEE HAS CLAIMED FOREIGN TRAVEL EXPENSES OF ` 2 30 024/-. HE THEREFORE REQUIRED THE ASSESSEE TO FURNISH THE DETAILS OF THE SAID EXPENSES AND ALSO TO ESTABLISH THE PURP OSE OF THE FOREIGN VISIT BEING FOR ITS BUSINESS. THE ASSESSEE HOWEVER DID NOT PRODUCE T HE REQUIRED DETAILS AND DOCUMENTS ON THE GROUND THAT THE RELEVANT DOCUMENTS HAVE ALREADY BEEN IMPOUNDED DURING THE COURSE OF SURVEY. THE A.O. THEREFORE GAVE AN OPPORTUNITY TO THE ASSESSEE TO OBTAIN THE PHOTOCOPIES OF THE DOCUMENTS CLAIMED TO HAVE BEEN I MPOUNDED AND FURNISH THE SAME TO SUPPORT AND SUBSTANTIATE ITS CLAIM FOR FOREIGN TRAV EL EXPENSES. THE ASSESSEE HOWEVER STILL FAILED TO PRODUCE THE SAID DOCUMENT. ITS CLA IM FOR FOREIGN TRAVEL EXPENSES WAS STILL SOUGHT TO BE JUSTIFIED BY THE ASSESSEE BY SUBMITTIN G THAT ONE OF ITS PARTNERS SHRI CHIRAG GADA HAD VISITED HONG KONG TO SEE THE LATEST TREND S SO THAT SAME KIND OF GOODS COULD BE PURCHASED AND MADE AVAILABLE FOR SALE TO ITS CUSTOM ERS. THIS SUBMISSION OF THE ASSESSEE HOWEVER WAS NOT ACCEPTED BY THE A.O. IN ABSENCE OF ANY DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE TO SHOW THE PLACES VISITED TRENDS OBSERVED GOODS IMPORTED ETC. ACCORDINGLY HE DISALLOWED THE FOREIGN TRAVEL EXPEN SES CLAIMED BY THE ASSESSEE OBSERVING THAT THE ASSESSEE COULD NOT ESTABLISH THAT THE SAME WERE WHOLLY AND EXCLUSIVELY INCURRED FOR THE PURPOSE OF ITS BUSINESS. 10. THE DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF FOREIGN TRAVEL EXPENSES WAS CHALLENGED BY THE ASSESSEE IN AN APPEAL FILED BEFOR E THE LD. CIT(A) AND AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS MADE ON BEHALF OF TH E ASSESSEE BEFORE HIM AS WELL AS THE DUPLICATE COPY OF SUPPORTING BILLS FILED BEFORE HIM AS ADDITIONAL EVIDENCE THE LD. CIT(A) 7 ITA 4082/MUM/09 M/S TRIOS DELETED THE SAID DISALLOWANCE FOR THE FOLLOWING REA SONS GIVEN IN PARA NO. 4.2 AND 4.3 OF HIS IMPUGNED ORDER. I HAVE PERUSED THE ASSESSMENT ORDER AND THE WRITTEN SUBMISSIONS OF THE APPELLANT. THE APPELLANT HAD SUBMITTED THE LEDGER ACCOUNT WHICH CONTAINED FULL DETAILS OF THE EXPENDITURE INCURRED. ONE OF THE PA RTNERS HAD VISITED HONG KONG WHICH IS A BUSINESS CENTRE FOR GARMENT TRADE. THE ASSESSING OFFICER HAS DISALLOWED THIS EXPENDITURE ON HIS SUBJECTIVE FINDING THAT IT IS NOT FOR THE PURPOSE OF BUSINESS. THE APPELLANT FIRM IS LOCATED AT UPMARKET BADRA AR EA AND SO IT IS QUITE NATURAL FOR ITS PARTNER TO VISIT HONG KONG FOR ASCE RTAINING THE BUSINESS FASHION TRENDS. THE APPELLANT HAS ALL THE NECESSARY DETAIL S REGARDING THIS EXPENDITURE AND THE PAYMENT HAS ALSO BEEN MADE BY CHEQUE. THE ASSESSING OFFICER CANNOT STEP INTO THE SHOES OF BUSINESSMAN AND DECIDE WHAT EXPENDITURE AR E TO BE INCURRED AND HOW. THE ASSESSING OFFICER SHOULD HAVE TAKEN INTO ACCOUNT TH E FACT THAT THERE IS A 70% JUMP IN TURNOVER AND SO SHOULD HAVE TAKEN A LIBERAL VIEW IN STEAD OF RESORTING TO SUCH NITPICKING. TO MY MIND THERE IS NO CASE FOR ANY D ISALLOWANCE OF TRAVELING EXPENSES AS ALL THE NECESSARY DOCUMENTARY EVIDENCES HAVE BEE N FILED AND THERE IS NOTHING IN POSSESSION OF THE ASSESSING OFFICER TO SUGGEST THAT THEY ARE NOT GENUINE. THE ADDITION SO MADE OF ` 2 30 024/- IS DELETED. 11. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. ALTHOUGH THE LEARNED COUNSEL F OR THE ASSESSEE HAS MADE AN ATTEMPT TO SUPPORT THE IMPUGNED ORDER OF THE LD. CIT(A) GIVING RELIEF TO THE ASSESSEE ON THIS ISSUE BY SUBMITTING THAT THE FOREIGN VISITS WERE UNDERTAKEN BY ONE OF THE PARTNERS OF THE ASSESSEE FIRM FOR THE PURPOSE OF ITS BUSINESS THERE IS NO D OCUMENTARY EVIDENCE TO SUPPORT AND SUBSTANTIATE SAME. EVEN THE COPIES OF RELEVANT BILL S ISSUED BY THE CONCERNED TRAVEL AGENT AND FILED BY THE ASSESSEE AS SUPPORTING EVIDENCE I N OUR OPINION ARE NOT SUFFICIENT TO ESTABLISH THAT THE FOREIGN TOURS UNDERTAKEN BY ONE OF THE PARTNERS OF THE ASSESSEE WERE FOR THE PURPOSE OF ITS BUSINESS. AS ADMITTED BY THE LEA RNED COUNSEL FOR THE ASSESSEE IN A QUERY RAISED BY THE BENCH THE SAID FOREIGN TOURS WERE UN DERTAKEN BY THE PARTNER OF THE ASSESSEE UNDER TOURIST VISA AND KEEPING IN VIEW ALL THESE FA CTS AS WELL AS THE FACT THAT THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE ANY DOCUMENTA RY EVIDENCE TO ESTABLISH THE BUSINESS EXPEDIENCY OF THE FOREIGN TOURS UNDERTAKEN BY ITS PARTNER WE ARE OF THE VIEW THAT THE DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF FOREIGN TRAVEL EXPENSES WAS RIGHTLY MADE AND THE LEARNED CIT(A) WAS NOT JUSTIFIED IN DELETIN G THE SAME MERELY ON THE BASIS OF ORAL ASSUMPTIONS MADE ON BEHALF OF THE ASSESSEE. WE TH EREFORE SET ASIDE THE IMPUGNED ORDER 8 ITA 4082/MUM/09 M/S TRIOS OF THE LD. CIT(A) ON THIS ISSUE AND RESTORE THAT OF THE A.O. GROUND NO. 2 OF REVENUES APPEAL IS ACCORDINGLY ALLOWED. 4. IN THE RESULT APPEAL OF THE REVENUE IS PARTLY A LLOWED. ORDER PRONOUNCED ON 10 TH DECEMBER 2010. SD/- SD/- (V. DURGA RAO) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTAN T MEMBER MUMBAI DATED 10 TH DECEMBER 2010. RK COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XIX - MUMBAI 4. THE CIT- 19 MUMBAI 5. THE DR BENCH E 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI 9 ITA 4082/MUM/09 M/S TRIOS ` DATE INITIALS 1. DRAFT DICTATED 30.11.10 2.12.10 SR.P.S./P.S. 2. DRAFT PLACED BEFORE AUTHOR 1.12.10 2.12.10 SR.P.S./P.S. 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER. - J.M./A.M. 4.DRAFT DISCUSSED/ APPROVED BY SECOND MEMBER. J.M./A.M. 5. APPROVED DRAFT COMES TO THE SR.P.S./P.S. SR.P.S./P.S. 6. KEPT FOR PRONOUNCEMENT ON SR.P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S. 8. DATE OF WHICH FILE GOES TO THE HEAD CLERK. 9. DATE OF DISPATCH OF ORDER.