Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH: ‘D’: NEW DELHI
Before: SH. H.S. SIDHU & SH. O.P. KANT
ORDER PER O.P. KANT, A.M.: This appeal by the assessee is directed against order dated 28/02/2013 of the Ld. Commissioner of Income-tax(Appeals)-19, New Delhi for assessment year 2008-09 raising following grounds:
1. Erred inupholding the adhoc addition of Rs 4,35,345 made by the Assistant Commissioner of Income Tax. Circle 17(1), New Delhi (‘Ld. AO’) on account of increase in travelling and conveyance expenses without providing any cogent and germane reasons and also without appreciating the fact the said expenses were incurred by the appellant wholly and exclusively for the purposes of its business.
2. Withoutprejudice to the above, Ld. CIT(A)/ Ld. AO failed to envisage the commercial expediency of incurring travelling and conveyance expenses by the appellant from the details of travelling and conveyance expenses placed on record before them.
3. Withoutprejudice to the above, Ld. CIT (A)/Ld. AO failed to appreciate the trite law that ‘estimated additions without any basis are unsustainable’ and has further erred in not correctly appreciating the judicial precedents placed on record by the appellant. All of the above grounds of appeal are without prejudice and notwithstanding each other. The appellant craves leave to add, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal. Any consequential relief, to which the appellant may be entitled under the law in pursuance of the aforesaid grounds of appeal, or otherwise, may be thus granted.
The facts in brief of the case are that the assessee company was engaged in marketing and distribution of various products manufactured by the Verifone Group, i.e., POS Terminals, Integrated Terminals, ATMs, Electronic Cash Register etc. and in the assessment completed under section 143(3) of the Income-tax Act, 1961 (for short ‘the Act’), 10% out of travelling expenses amounting to Rs. 4,35,345/- were disallowed along with other disallowances. The Assessing Officer observed increase in travelling and conveyance expenses from Rs. 26,34,794/- in preceding year to Rs. 43,53,444/- in current year, which in percentage terms was 65.23% increase as compared to increase of 12% in revenue. The reason for increase in the travelling and conveyance expenses was stated by the assessee as due to international travelling for takeover of the ‘Verifone Israel’ by ‘Verifone Inc.’, which according to the Assessing Officer was not business expenditure incurred wholly and exclusively for the purpose of the assessee.
The Ld. Commissioner of Income-tax( Appeals) upheld the disallowance with the observation that the assessee failed to produce relevant bills and vouchers not only during assessment proceeding but also during the remand proceeding. Aggrieved, the assessee is in appeal raising the grounds as reproduced above. 4. In the grounds of appeal
raised, sole grievance is in respect of disallowance of Rs. 4,35,345/- on account of travelling and conveyance sustained by the Ld. Commissioner of Income-tax( Appeals).
5. The ld. Authorized Representative of the assessee submitted that the increase in travelling expenses was mainly due to the increase in international travelling related to the takeover of Verifone Israel by Verifone Inc., expenditure of Rs. 6.5 lakh on account of trainings in business meeting abroad and increase of Rs. 6 Lacs in domestic travelling. He further submitted that due to takeover of the Lipman Inc. by Verifone Inc., name of all group companies including the assessee were changed from Lipman to Verifone and in order to understand the new global policies and structure, which was required to be adhered by all group companies, the assessee was required to incur such travelling expenses.