DCIT, NEW DELHI vs. M/S GRANITE SERVICES INTERNATIONAL INDIA PVT. LTD.,, NEW DELHI

The grounds of appeal are as under:-

The assessee is engaged in the business of providing Technical Associates & Consultancy Services for power plants and business process outsourcing activities. Return declaring income of Rs.13,05,31,760/- was filed by the assessee on 30/09/2009. The return was processed u/s 143(1) of the Act and the case was selected for scrutiny. The Assessing Officer completed the assessment u/s 143(3) of the Act after making a disallowance of Rs.92,75,102/- being 10% of expenses claimed under the head ‘travel and conveyance’.

Being aggrieved by the same the assessee filed appeal before the CIT(A). The CIT(A) allowed the appeal of the assessee.

The Ld. AR submitted that all the relevant records were filed before the Assessing Officer but the same was not properly taken into account by the Assessing Officer.

The Ld. DR submitted that the Assessing Officer was right in disallowing the travel and conveyance expenses as the Assessing Officer during the processing has given format wherein the date of travel, name of present travel, whether employee or not, travel from, travel to, total value of ticket, food and lodging, other expenses and total expenses incurred was mentioned in the said format. The assessee could not furnish the details as per the prescribed manner and format provided by the Assessing Officer. The Assessing Officer, therefore, took 10% of total expenses incurred under this head and added the same to the income of the assessee.

The Ld. AR submitted that the assessee has given details as related to the date of travel expenses of air ticket, expenses on food and lodging and other expenses but could not give the details of travel from, travel to, as well as the total value of ticket and bifurcation of the food and lodging.

We have heard both the parties and perused the material available on record. The CIT(A) in his order held that the assessee could not furnish the details as per the format given by the Assessing Officer. But the CIT(A) processed on the basis that there was no defect short comings discrepancies in any of the items of expenditure which was submitted by the Assessing Officer. But the CIT(A) ignored that there was no bifurcation given by the assessee relating to travelling and conveyance expenses. Therefore, this matter needs to be verified by the Assessing Officer. The order of CIT(A) is set aside. Needless to say, the assessee has to be given proper hearing as per the principal of natural justice.

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