TMI Blog2010 (1) TMI 885X X X X Extracts X X X X X X X X Extracts X X X X ..... otal expenses to the above extent to the local parties who had made the payments to the hotels on behalf of the assessee - Held that:- Even if the assessee had reimbursed the hotel expenses to the local parties who had made the bookings and effected the payments after obtaining a handsome discount there should have been no difficulty in the assessee obtaining a confirmation from those parties in support of the claim, no evidence in support of the hotel expenses disallowance upheld. - ITA No. 1822/Mum/2009 - - - Dated:- 18-1-2010 - R.V. Easwar, J. Sudhakar Reddy, JJ. J.D. Mistry for the Appellant Mohammed Usman, DR, for the Respondent ORDER R.V. Easwar: The assessee in this appeal is a company engaged in the manufacture of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther pointed out that M/s.Gargi continued to charge Rs.21/- per litre from Nova group since there was no change in the quality of the material supplied to them. In other words, the assessee's explanation was that the higher quality of the material justified the higher price. This explanation was rejected by the Assessing Officer as being very general in nature, not supported by evidence to demonstrate that the material supplied by M/s.Gargi after the aforesaid date was of higher grade than what was being supplied by them to Nova group of companies. In this view of the matter, he considered the difference of Rs.4/- per litre as being excessive or unreasonable and since the assessee had purchased 92,000 litres of the material from M/s. Gargi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that date to M/s. Kirloskar Oil Engines Ltd. (KOEL) and accordingly the price of Rs.25/- per litre was comparable to the rates charges from others for the same product. At page 24 to 28 the assessee has compiled details showing supply of the material by M/s.Gargi Industries party-wise throughout the year with the bill nos., dates, quantity, value, basic rate etc. These details show that even on 17.4.2004, KOEL was supplied 1200 litres of the material at Rs.25/- per litre. On 30.4.2004 KOEL was supplied the material @ Rs.25/- per litre. The details given at page 30 of the paper book show that the assessee has increased the prices of the finished products manufactured by it from 28.7.2004. For example, the product by name Koalid RM (941) whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessed to tax. The assessee itself has declared a total income of Rs.8,31,43,095/-. It cannot therefore be suggested that the assessee was indulging in unfair means to shift its profits to another entity. Both the assessee and Gargi Industries are in the maximum tax bracket and there can be no tax advantage. In these circumstances, we see no merit in the disallowance which is hereby deleted. Ground no.1 is thus allowed. 5. The second ground is directed against the disallowance of foreign travel expenses of Rs.1,54,168/-. From the details filed by the assessee in response to the query raised by the Assessing Officer, it was noticed that there was no bill or voucher in support of the assessee's claim that it had reimbursed total expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee was not able to adduce any evidence for the hotel expenses of Rs.1,54,168/-. It does appear somewhat unusual that the assessee did not make payments directly to the hotels in which case there would have been no difficulty in getting the documentary evidence. Even if the assessee had reimbursed the hotel expenses to the local parties who had made the bookings and effected the payments after obtaining a handsome discount there should have been no difficulty in the assessee obtaining a confirmation from those parties in support of the claim. In the ultimate analysis, whatever be the probabilities, the fact remains that there is no evidence in support of the hotel expenses of Rs.1,54,168/-. We therefore have no option but to up ..... X X X X Extracts X X X X X X X X Extracts X X X X
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