Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2016 (1) TMI 350

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ssioner of Income Tax (Appeals) Central-III, Kolkata in appeal No.255/CC-XX/CIT(A)CIII/ 11-12/Kol. dated 26.11.2012. Assessment was framed by JCIT(OSD),CCXX., Kolkata u/s 144 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) vide his order dated 26.12.2011 for assessment year 2004-05. 2. The issue raised by assessee in his appeal is that Ld. CIT(A) has confirmed the order of Assessing Officer by sustaining the disallowance of ₹ 12,47,860/- on account of foreign travel having no nexus with the business of assessee. 3. Briefly stated facts are that assessee is a private limited company and is in the business of transportation and co-ordination of coal. On 13-01-2010 there was a search operation conducted in the business premises of assessee u/s 132 of the Act. In pursuant to search Assessing Officer issued notices u/s. 153A/153(2)/142(1) of the Act upon assessee. The assessee was called upon to submit various details on different dates, however no substantial details were furnished before AO for completing assessment under the Act. Only some details were furnished by assessee which were not sufficient enough to make the assessment in scientific manner. So .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... gn travel. 8. Such other queries raised from time to time, which were not answered and, therefore, adequate action could not be taken up issuewise. However Aggrieved, assessee preferred an appeal before Ld. CIT(A), who has passed order after making certain additions and deductions to the assessee. However, the CIT(A) has confirmed the disallowances made by the AO for expenses incurred on foreign travel by assessee. However, Ld. AR of assessee submitted during the appellate proceedings that the expenses was incurred on the foreign travel of Shri Arjun Kumar, a director of the assesseecompany to Singapore, Europe and UK for the purposes of business. In this regard, assessee produced copies of the invitation letters from M/s Rag Trading Asia Pacific Pvt. Ltd. and M/s Derek Parnaby Cyclones International Ltd., U.K. Therefore, assessee expressed that the said foreign travel expenses was incurred wholly and exclusively for business purposes and are allowable u/s 37 of the Act. The Ld. AR also submitted that the issue of foreign travel has become closed at the time of original assessment u/s. 143(3) of the Act. So once the issue which is closed in assessment u/s. 143(3) of the .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ment made u/s. 144/153 of the Act, in spite of the fact that the A.O had not issued the statutory notice calling upon the appellant assessee to show cause why the assessment should not be completed to the best of his judgment. 3(a). On the facts and in the circumstances of the case, the learned CIT(A) failed to appreciate that the issue of examination of Foreign Travel expenses had been closed during the time of the original assessment u/s. 143(3) of the Act and that since no incriminating material on this issue had been found during the search, the mater could not be re-examined at the stage of the fresh assessment u/s. 144/153A. 3(b). On the facts and in the circumstances of the case, the learned CIT(A) erred in holding that the appellant had failed to establish that the director of the appellant company had undertaken foreign tours for the purpose of the appellant s business and in that view, in sustaining the disallowance of ₹ 12,47,860/- out of Foreign Travel expenses. Shri Ravi Tulsiyan, Ld. Authorized Representative appearing on behalf of assessee and Shri Niraj Kumar, Ld. Departmental Representative appearing on behalf of Department. 4. We have he .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... and information produced for verification. However, Ld. CIT(A) recorded in his order that there was no business nexus for the said foreign travel of Shri Arjun Kumar to Singapore, Europe and UK and he disallowed the same. From the aforesaid discussion, it is clear that there is no doubt about the expenditure incurred on the foreign travel but the question arise whether that foreign travel was in connection with assessee s business or not. Besides it was also argued by the Ld. AR that the action of the lower authorities for re-opening the assessed case under section 153A of the Act is ultra vires as long as there is no incrimination material found during the time of search. The Ld. AR has submitted that the necessary details to justify the business connection of the aforesaid trip. As regards the challenging of the reopeing case we can rely on Hon'ble Delhi High Court judgment in the case of Kabul Chawla ITA. Nos. 707, 709 and 713 of 2014. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed i .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates