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TMI Blog2007 (6) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... ign travel expenses of Rs. 1,18,630. 4. The facts, in brief, are that the Assessing Officer disallowed these expenses mainly for the reason that assessee-firm was not engaged in export of jewellery and it was a business leader, hence, there was no requirement for such foreign travel. On appeal, the CIT(A), following the appellate order for assessment year 2001-02, deleted the disallowance. Aggrieved by this, the Revenue is in appeal, before us. 5. The learned Departmental Representative placed strong reliance on the order of Assessing Officer whereas the learned counsel for the assessee placed strong reliance on the order of learned CIT(A). 6. We have considered the submissions made by both sides, material on record an orders of authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... support its claim which have been summarized by the Assessing Officer as under. "The sum and substance of assessee's submissions on the issue is summarized as under : (i)The branch office located at Hyderabad (classified by the assessee as "unit") is engaged in manufacture and sale of jewellery (gold ornaments and diamond ornaments). (ii)The branch office has got manufactured jewellery by Mumbai office. (iii)The Mumbai office manufactures jewellery through various Karigars on behalf of branch office under the supervision of the employees of Hyderabad unit. (iv)The jewellery for branch office is manufactured by head office as per the designe given by the designers employed by branch office. (v)Designers of Hyderabad unit give the desig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the assessee's case [as found in para 6(vi) above] and for detailed reasons recorded in above paras 9 and 10, it is held that assessee's branch office located at Hyderabad is not "industrial undertaking". It is branch office of the assessee trading in the ornaments. It is not engaged in manufacturing of ornaments. Without admitting but presuming that goods were manufactured for branch office as claimed by the assessee, even the goods manufactured by head office for branch office cannot be regarded as "goods manufactured by branch office" for the following reasons : (i)Raw-material is purchased by head office. (ii)Karigars were deployed by the head office. (iii)Payment for raw-material as well as making charges are paid by head offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentative also drew our attention to the provisions of section 80-IB(2)(iii) to contend that existence of plant and machinery was presupposed. The learned Departmental Representative also placed strong reliance on the decision of Hon'ble Allahabad High Court in the case of Mahendra Kumar Agarwal v. CIT [2005] 277 ITR 71 in this regard and also contended that the decision of the Hon'ble Bombay High Court in the case of Penwalt India Ltd. (supra) had also been considered by the Hon'ble Allahabad High Court. 10. The learned counsel for the assessee, on the other hand, narrated the factual matrix of the case, reiterated the submissions made before the revenue authorities. The learned counsel drew our attention to the headnotes in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Hyderabad. The assessee is in the business of jewellery manufacturing. The pattern and designs of jewellery change in accordance with the customers choices in different regions. The assessee's unit situated at Hyderabad is accordingly getting its manufacturing of jewellery at Mumbai under the supervision and control of its employees through the help of Mumbai office. Thus, mere involvement of Mumbai office cannot be so dominant so as to ignore the actual nature of operations carried on by the Hyderabad unit. It is also not in dispute that assessee's unit is maintaining separate books of account and it is a part of the same assessee, hence, internal entries made in the books of account of head office and this unit cannot overshadow the nat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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