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Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA
Before: Sri J. Sudhakar Reddy & Sri S.S. Viswanethra Ravi]
Medica Hospitals Private Ltd………….…….………………………………………………….……..Appellant 127, Mukundapar E.M. Byepass Kolkata – 700 099 [PAN : AAFCM 0338 M] JCIT, Range-1, Kolkata…..……………………………………………………………………………..Respondent Ayakar Bhawan P-7, Chowringhee Square Kolkata – 700 069 Appearances by: Shri S.M. Surana, Advocate, appeared on behalf of the assessee. Shri A. Bhattacharya, Addl. CIT, appearing on behalf of the Revenue Date of concluding the hearing : May 16th, 2018 Date of pronouncing the order : July 4th , 2018 O R D E R Per J. Sudhakar Reddy :-
This is an appeal filed by the assessee directed against the order of the Commissioner of Income Tax (Appeals)-5, (hereinafter the ‘Ld. CIT(A)’), dt. 30/06/2016, passed u/s 250 of the Income Tax Act, 1961 (hereinafter the ‘Act’), relating to Assessment Year 2011-12.
The assessee is a Limited Company and runs a super speciality hospital. The sole issue before us is the disallowance for foreign travel expenses.
After hearing rival contentions, perusing the papers on record, orders of the authorities below as well as case-law cited, we hold as follows:-
Assessment Year: 2011-12 Medica Hospitals Private Ltd 3.1. At page 2 para 4 of the assessment order, the Assessing Officer held as follows:- “4. It appears from the record that the assessee company has incurred the following expenses for foreign traveling during the year under consideration: Particulars Amount (Rs.) Three conference – NABC conference, 8,89,964.00/- Dakshini Bengali Association of California and Business Representation at sarod Utsav 2010 OPD Clinic in association with 2,83,907.00/- Bangladesh Medical Association, Press Conference, Conducting CME and Advertisement Medical Conference - Congress of 3,26,502.00/- Neurological Surgeon during 16th October to 21st October, 2010 Total 15,00,373/- It is clear from the information as mentioned above that the purpose for which the foreign travelling expenses were incurred has no business connection with the assesse company. Therefore, the entire amount of Rs.15,00,373/- is disallowed and added to the total income of the assessee.”
The ld. CIT(A) has at para 2.2. and 2.3. of his order held as follows:- “2.2. The last item in the above chart is claimed attributable to various tours for business development. In the chart enclosed to the submission, there is another chart which lists out various foreign travel expenses aggregating to Rs. 11,84,821/-. The expense is incurred against Chairman, Vice Chairman, President and Chief Engineer and two or three more persons, whose designation or responsibility has not been listed in the said chart under Group - D. 2.3 The appellant runs a hospital in Kolkata at Mukundaupur Embypass, Kolkata-700099. The expenses aggregating to Rs. 11,84,821/- has broadly been termed as business development'. The expense against Chairman and Vice Chairman constitutes substantial portion of the purported business development expense. From the papers submitted and the submission, it is not clear as to how these foreign travel expenses may be for the purpose of business. The amount of Rs. 11,84,821/- is confirmed as addition. The balance from Rs. - 15,00,373/- added by the AO is allowed as deductible.”
When the Assessing Officer has allowed this amount of Rs.11,84,821/-. He only disallowed the amount of Rs. 15,00,373/-. The ld. CIT(A) was wrong in disallowing this amount of Rs.11,84,821/- while deleting the disallowance of Rs.15,00,373/- made by the Assessing Officer. The issue of allowability of Rs.11,84,821/-, was not before the ld. CIT(A). This has been done without giving Assessment Year: 2011-12 Medica Hospitals Private Ltd notice to the assessee. Hence we delete this disallowance and allow this appeal of the assessee.
In the result, appeal of the assessee is allowed. Kolkata, the 4th day of July, 2018. Sd/- Sd/- [S.S. Viswanethra Ravi] [J. Sudhakar Reddy] Judicial Member Accountant Member Dated : 04.07.2018 {SC SPS} Copy of the order forwarded to: 1. Medica Hospitals Private Ltd 127, Mukundapar E.M. Byepass Kolkata – 700 099 2. JCIT, Range-1, Kolkata Ayakar Bhawan P-7, Chowringhee Square Kolkata – 700 069 Kolkata – 700 054 3. CIT(A)- 4. CIT- , 5. CIT(DR), Kolkata Benches, Kolkata.