SAJ TEST PLANT PRIVATE LIMITED,,PUNE vs. DEPUTY COMMISSIONER OF INCOME TAX,, PUNE

आयकर अपीलीय अिधकरण “ए” �यायपीठ पुणे म� । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE �ी डी. क�णाकरा राव, लेखा सद�य एवं �ी िवकास अव�थी, �याियक सद�य के सम� BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM आयकर अपील सं. / ITA Nos.690 & 691/PUN/2017 िनधा�रण वष� / Assessment Years : 2010-11 & 2013-14 SAJ Test Plant Private Limited, 72/76, Mundhwa, Pune Cantonment, Pune-411036. .......अपीलाथ� / Appellant PAN : AABCS4227K बनाम / V/s. JCIT, Range-6/DCIT, Circle-6, ……��यथ� / Respondent Pune. Assessee by : Shri C. H. Naniwadekar Revenue by : Smt. Shabana Parveen सुनवाई क� तारीख / Date of Hearing : 13.06.2019 घोषणा क� तारीख / Date of Pronouncement : 27.06.2019 आदेश / ORDER PER D. KARUNAKARA RAO, AM: There are two appeals filed by the assessee for the assessment years 2010-11 and 2013-14 under consideration. Both the appeals of the assessee are filed against the common order of the CIT(A)-4, Pune dated 21.11.2016 for the assessment years 2010-11 and 2013-14 respectively. 2. The issues raised in both the appeals of the assessee are identical and it relates to the ad-hoc disallowance @ 20% of the Foreign Travel Expenses claimed in the returns of income. 3. Briefly stated the relevant facts include that the assessee is engaged in the business of manufacturing and selling of dynamometers,

2 ITA Nos.690 & 691/PUN/2017 control systems and allied products. In the assessment, the Assessing Officer disallowed a sum of Rs.3,17,711/- for the assessment year 2010-11. Similarly, an amount of Rs.69,000/- was disallowed for the assessment year 2013-14. The Assessing Officer applied the flat rate of 20% in both the assessment years while disallowing the above amounts. The reason given by the Assessing Officer in the assessment year 2010-11 includes that the “visit report” furnished by the assessee are self-serving documents. Otherwise, it is an admitted fact that the assessee furnished travelling bills showing the purchase of foreign currency and air tickets etc and the bills relating to the boarding and lodging, conveyance etc were not submitted for verification. The CIT(A) confirmed the above disallowances. 4. Before us, on the common issues raised in both the appeals, ld. Counsel for the assessee submitted that the expenditure on account of foreign travel was incurred in connection with the employees, who are also the directors of the assessee company. Further, no foreign travel in relation to the employees’ family members/relatives/spouses were involved in this case. Further, relying on the decision of the Co-ordinate Bench of the Tribunal in the case of ACIT vs. M/s. Associated Dairy Fab Pvt. Ltd. vide ITA No.1914/PUN/2016 for the assessment year 2011-12 dated 07.02.2019, ld. Counsel for the assessee read out the contents of para 15 of the said order of the Tribunal (supra) and submitted that when the employees/directors of the company undertook the foreign travel, the ad-hoc disallowance is uncalled for.

3 ITA Nos.690 & 691/PUN/2017 5. On the other hand, ld. DR for the Revenue relieved heavily on the orders of the revenue authorities. 6. On hearing both the sides on this limited issue, we find the contents of para 15 of the said order of the Tribunal (supra) are relevant to extract and the same are as under :- “15. Having heard both the sides and gone through the material on record, it is observed from the factual position narrated in the impugned foreign visits were undertaken order that the only by the Employees/Directors of the assessee company for business purpose and no family member of such executives accompanied them. This has not been controverted on behalf of the Revenue. The Tribunal vide its aforesaid order for the preceding year has sustained the addition in respect of family members accompanying the Employees/Directors of the company. In so far as the other expenses towards foreign visits of the Directors/Employees are concerned, the same stood allowed. Since no family member of the Directors/Employees of the assessee company accompanied such visiting persons, in our considered opinion, no disallowance is warranted. The same is held to have been rightly deleted.”

4 ITA Nos.690 & 691/PUN/2017 made by the Assessing Officer is unsustainable in law. Accordingly, the relevant grounds raised by the assessee on this issue are allowed. 8. In the result, both the appeals of the assessee are allowed. Order pronounced on 27th day of June, 2019. Sd/- Sd/- (िवकास अव�थी /VIKAS AWASTHY) (डी. क�णाकरा राव/D. KARUNAKARA RAO) �याियक सद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 27th June, 2019. Sujeet आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(A)-4, Pune. 4. The Pr.CCIT, Pune. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “ए” ब�च, 5. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.