VISHRANTHI HOMES P LTD.,CHENNAI vs. DCIT CORPORATE CIRCLE 3(2), CHENNAI

In this appeal of the assessee, the following are the three issues raised by way of seven grounds:- i. Disallowance of foreign travel expenses to the tune of Rs.3,56,231/- u/s.37(1) of the Act. ii. Disallowance of the claim of expenses incurred u/s.35D of the Act. iii. Disallowance of the claim of payment made to commercial department for non-payment of TDS u/s.3 of T.N. VAT Act, 2006.

At the outset the ld.counsel for the assessee took us to the findings given by the CIT(A) at pages 4 & 5 in relation to these three issues and he read out the findings of these three issues. The relevant findings given by the CIT(A) on these three issues reads as under:- “Foreign Travel Expenses - Rs3,52,231/-: Foreign Travel expenses held to be of personal nature. The AO disallowed the claim on the ground that no evidence was produced to establish the business nexus between the travel undertaken and the business of the appellant. In the appellate proceedings also, nothing further has been furnished to justify the expenditure AD’s order therefore needs no interference and this ground stands dismissed.

The AO has disallowed the said sum on the ground that the amount (which is preliminary expenses written off) has been claimed beyond 5 years and hence is not allowable. No interference in AOs order is called for as the same is as per the Act. This ground stands dismissed. V. Disallowance of penalty on work contract tax - Rs.5,08,386/-: The AC found that appellant had paid the penalty to Commercial Tax Department for non-payment of TDS under Section 3 of the TN VAT. Act 2006. I find that the AOs disallowance is on a correct footing since penalty is not an allowable expenditure as per Section 37 of the I.T. Act. This ground therefore stands dismissed.”

The ld.counsel pointed out from the above reproduced findings that no facts has been discussed by the CIT(A), rather he has simply confirmed the order of AO without any discussion. Hence, he requested for setting aside all these issues to the file of the CIT(A) afresh. When a query was put to ld.senior Departmental Representative, he fairly agreed for setting aside these three issues back to the file of the CIT(A).

After hearing both the sides and going through the order of the CIT(A), we are convinced that the CIT(A) has not discussed any of the facts and simply confirmed the order of the AO. Hence in the earnest of things, we set aside the order of CIT(A) and remand the matter back for fresh adjudication after allowing reasonable opportunity to the assessee. Matter restored back to the file of the CIT(A).

In the result, the appeal of the assessee is allowed for statistical purpose.