THE DCIT, CIR-52, KOLKATA, KOLKATA vs. M/S A & A INTERNATIONAL, KOLKATA

First we take up the appeal of the assessee for A.Y. 2005-06, wherein the following grounds are raised:- (1) For that the ld. CIT(Appeals)-XXXIII made observations which are contrary to law and facts.

(2) For that the ld. CIT(A)-XXXIII has erred in holding that the expenditure of Rs.5,39,543/- made for foreign travel was for business purpose which is contrary to fact of the case.

At the time of hearing before us, nobody has appeared on behalf of the Revenue. This appeal of the assessee is, therefore, being disposed of ex-parte qua the respondent-Revenue after hearing the arguments of the ld. Counsel for the assessee and perusing the relevant material available on record.

Grounds No. 1 & 4 raised by the assessee in this appeal are general in nature, which do not call for any specific adjudication.

As regards the issue involved in Ground No. 2 of the assessee’s appeal relating to the disallowance of Rs.5,39,543/- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on account of foreign travel expense, it is observed that the Assessing Officer during the course of assessment proceedings found on perusal of the relevant details furnished by the assessee that the expenses of Rs.5,39,543/- claimed by the assessee on account of foreign travel expenses were actually incurred on the travel undertaken by the relatives of the partners of the assessee-firm. Although the assessee explained before the Assessing Officer that the said relatives had undertaken the foreign trips for the purpose of its business, the Assessing Officer found that there was no documentary evidence filed by the assessee to support and substantiate the same. He accordingly treated the foreign travel expenses claimed by the assessee to the extent of Rs.5,39,543/- as personal expenses and disallowed the same.

On appeal, the ld. CIT(Appeals) confirmed the disallowance made by the Assessing Officer on this issue observing that the details furnished by the assessee were not sufficient to establish that the concerned foreign visits had been undertaken by the relatives of the partners of the assessee-firm for business purpose.

At the time of hearing before us, the ld. Counsel for the assessee has invited our attention to the copies of certain e-mails sent by the assessee to show that even the relatives of the partners of the assessee- firm were involved in the family business and the foreign trips were undertaken by them for the business of the assessee-firm. We, however, find ourselves in agreement with the authorities below that the said e- mails sent by the assessee are not sufficient to establish that the concerned relatives of the partners of the assessee-firm, who had undertaken the relevant foreign trips, were also involved in some

As regards the issue involved in Ground no. 3 relating to the disallowance of 10% out of total motor car expenses and telephone expenses made by the Assessing Officer and confirmed by the ld. CIT(Appeals), it is observed that no record in the form of Log Book or Call Register, etc. was maintained by the assessee to establish that the expenses claimed on account of telephone and motor car are fully and exclusively incurred for the purpose of its business. In the absence of such record, the disallowance on account of personal element is very much called for and having regard all the facts of the case, we are of the view that such disallowance made by the Assessing Officer and confirmed by the ld. CIT(Appeals) to the extent of 10% of the total expenses claimed by the assessee is quite fair and reasonable. We, therefore, find no merit in Ground No. 3 of the assessee’s appeal and dismiss the same.

As regards the appeal of the Revenue, we have already noted that there was nobody appeared on behalf of the revenue at the time of hearing before us. As informed by the ld. CIT (D.R.), who was present in the Court, Ld Sr. D.R. was to argue this matter before the Tribunal but he has neither appeared nor intimated anything showing his intention to seek adjournment. The casual and negligent approach of the ld. Sr. D.R. clearly shows that the Revenue is not serious to prosecute this appeal filed before the Tribunal.

The law assists those who are vigilant and not those who sleep over their rights. This principle is embodied in the well known dictum – “vigilantibus, non dormientibus, jura subveniunt”.

Considering the facts and keeping in mind the provisions of Rule 19(2) of the ITAT Rules as was considered in the case of CIT –vs.- Multiplan India Pvt. Ltd. 38 ITD 320 (Del.) and the judgment of the Hon’ble Madhya Pradesh High Court in the case of Estate of Late Tukojirao Holkar –vs.- C.W.T. reported in 223 ITR 480, we treat this appeal as dismissed for non-prosecution.