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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI RAJENDRA, AM & SHRI AMARJIT SINGH, JM
O R D E R
PER AMARJIT SINGH, JM:
The assessee has filed the present appeal against the order dated 12.2.2016 passed by the Commissioner of Income Tax (Appeals) - 8, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2012- 13.
The assessee has raised the following grounds: - “1) (a) That the learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance made by the Assessing Officer in respect of Traveling & Conveyance Expenses of Rs
ITA No. 2333/M/2016 A.Y. 2011-12.
49,47,975/- out of the total genuinely incurred expenses of Rs,98,95,949/- for Traveling & Conveyance Expenses. (b) That full details about traveling & conveyance expenses have been duly furnished and action of the AO in disallowing 50% of the said expense by wrongly holding the same as having been inflated is totally unjustified and action of the learned C1T (A) in confirming the same is equally unjustified, (c) That the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the learned AO of not appreciating that, traveling & conveyance is paid lo employees and is a part of gross salary and that these expenses are incurred wholly and exclusively for the purpose of business. 2) That without prejudice to the above ground, the disallowance of 50% of the expenses (Rs.49,47,975) is otherwise highly excessive and unreasonable and is liable to be deleted. 3) The learned appellant craves leave to amend, to alter, to modify and/or delete any ground of appeal before the same is disposed off finally.”
3. The brief facts of the case are that the assessee filed its return of income on 29.09.2011 declaring total income to the tune of Rs.93,97,383/-. The assessee also declared book profit of Rs.37,57,930/- u/s 115JB of the Act. The return of income was processed u/s 143(1) of the Act. Thereafter, the case was selected for scrutiny. Therefore, notice u/s 143(2) of the Act dated 25.09.2012 was issued and served upon the assessee on 27.09.2012. Thereafter, notice u/s 142(1) of the Act dated 07.05.2013 was issued and served upon the assesse and another notice u/s 142(1) of the Act on 02.01.2014 was also issued and served upon the assessee. The assessee company was engaged in the business of Chit Fund. The claim of the assessee in connection with the Travelling & Conveyance Expenses was disallowed to the extent of 50% and the total income of the assessee was assessed to the tune of Rs.14,52,45,580/-. The assessee filed an appeal before the CIT(A) who confirmed the disallowance to the extent of 50% of ITA No. 2333/M/2016 A.Y. 2011-12. the Travelling & conveyance Expenses, therefore, the assessee has filed the present appeal before us.
ISSUE NOs.1 & 2:- 4. We have heard the argument advanced by the Ld. Representative of the parties and perused the record. On appraisal of the assessment order dated 28.03.2014, we noticed that under the head of Staff Meeting Expenses the claim of the assessee under the head of Travelling & Conveyance Expenses was to the tune of Rs.1,06,33,334/-. The assessee debited the conveyance allowances to the tune of Rs.98,95,949/- which was part of gross salary. The actual travelling & conveyance expenses was shown to the tune of Rs.7,37,385/-. The contention of the Ld. Representative of the assessee is that the salaried amount (conveyance amount) is not liable to be included while assessing the travelling expenses to the tune of Rs.98,95,949/-. The Assessing Officer rejected the claim of the assessee being not supported by evidence. The assessee filed the details before the AO by virtue of letter dated 27.01.2014 which lies at page no-1 to 10 of the paper book. The Assessing Officer nowhere discussed and took into consideration of the said piece of evidence while deciding these issues. The CIT(A) while confirming the said addition nowhere discussed the said documents. Anyhow the evidence adduced by the assessee was not discussed by the AO as well as CIT(A). The question of Travelling Expenses of the employees is specifically required to be dealt with. The facts needs verification at the end of the AO to ascertain the claim of Travelling & Conveyance Expenses. Therefore, in the said circumstances, we set aside the finding of the CIT(A) on this issue and restored this issue
ITA No. 2333/M/2016 A.Y. 2011-12. before the AO to decide the matter afresh in view of the details of Travelling & Conveyance Expenses which lies at page no- 1 to 10 of the paper book and by giving an opportunity of being heard to the assessee in accordance with law. Accordingly, these issues are being decided in favour of the assessee against the revenue.