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TMI Blog2016 (8) TMI 909X X X X Extracts X X X X X X X X Extracts X X X X ..... r foreign trips, the assessee produced the bills and vouchers only for Rs. 8,24,256/-. On an estimate basis, the Assessing Officer, disallowed 30% of the total expenditure of Rs. 15,77,819/-, ie., Rs. 4,73,345/- and added the same to the total income of the assessee, under Section 40A(2)(a) of the Income Tax Act. In terms of Section 69C of the Income Tax Act, the Assessing Officer disallowed a sum of Rs. 13,90,620/-. There were other heads of disallowance also. 3. Not satisfied with the order of the Assessing Officer, dated 28.01.2013, the appellant preferred an appeal to the Commissioner of Income- Tax (Appeals). Vide order, dated 24.12.2013, the Appellate Authority, in IT Appeal No.77/13-14, allowed the appeal, in part and confirmed the order of the Assessing Officer, in respect of disallowances under the heads, "Business Promotion Charges" and "Foreign Travel Expenditure". 4. Being aggrieved by the same, the assessee has filed I.T.A.No.1017/Mds/2014, before the Income-Tax Appellate Tribunal, "B" Bench, Chennai, which, after considering the rival submissions and material on record, confirmed the decisions of the Original/Appellate authority. Against the said order, instant Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,90,620/-, under Section 69C of the Income Tax Act, learned counsel for the appellant further submitted that though before the original authority, all the bills and vouchers, substantiating foreign travel for promotion of business, could not be produced, in the light of Rule 46A of the Income-Tax Rules, necessary bills were produced before the appellate authority. According to him, when the copies of the remaining bills and vouchers were produced to the appellate authority, for the balance amount of Rs. 13,90,620/-, the same were not considered by the Commissioner of Income-Tax (Appeals), in proper perspective, and he rejected summarily, by stating that the same cannot be entertained, at the appellate stage. 7. Learned counsel for the appellant further submitted that flight tickets were taken in the name of the Directors and in the light of rule 46A(1)(b), when the appellant made a specific ground in the appeal, that due to administrative reasons, the remaining bills could not be submitted before the assessing officer, before the completion of scrutiny proceedings, the documentary evidence produced before the appellate authority ought to have been considered on merits and that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g officer has disallowed only 30% of the credit credit payments, being personal in nature, out of total expenditure of Rs. 15,77,819/-, claimed as business promotion expenditure. 11. Though before the appellate authority, objections have been made for the disallowance, on the grounds that the assessing officer has failed to discharge the onus of proving that payments have been made to parties, under Section 40A(2) of the Income Tax Act, 1961, were excessive or unreasonable, from the perusal of the materials on record, it could be deduced that the appellate authority has categorically held that the assessing officer has given proper reasoning in his order that part of expenditure is not related to business and the same, in no way, has contributed for the purpose of business. The appellate authority has also found that credit card payments, relating to various purchases, relate to personal expenditure, as well as religious tourism, undertaken by the appellant company's Directors and employees and therefore, there is no irregularity, in disallowing 30%, claimed as business expenditure. So saying, the Commissioner of Income-Tax (Appeals), appellate authority, has confirmed the dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tained and therefore, there is a failure to adhere to Rule 46A(1)(b) of the Income-Tax Rules. He also submitted that the Income-Tax Appellate Tribunal has further erred in sustaining the order of the Commissioner of Income-Tax (Appeals), by merely stating that the payments to Business Promotion expenses are personal in nature and that there was no material document to show how those payments incurred was to promote the business of the assessee. 16. This Court is not inclined to accept the abovesaid contentions, for the reasons that while considering the plea of the appellant-assessee that they were prevented from producing sufficient evidence, the appellate authority has observed that even though foreign visits have been undertaken, evidence produced would not be entertained, at the appellate stage, as most of the bills furnished were in the name of the individual parties and hence, cannot be treated as business expenditure. From the above, it could be seen that it is not a case, where the appellate authority has totally rejected the documents, but the said authority has considered the merits of the submission and documents and held that they cannot be accepted, for the reasons as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,73,345/- is confirmed dismissing the grounds raised by the AR of the appellant." 19. The said finding recorded by the appellate authority, the expenses incurred for pilgrimage, has not been disputed and no materials have been filed to contradict the same. When the appellant has failed to substantiate that the visit to Mecca and Medina by the Directors, in whose names, tickets were issued and spent money through their credit cards for the stay in hotels, SPA, etc., was for promotion of business, only it cannot be contended that both the original/appellate authorities have erred, in not properly adverting to the statutory provisions, under Sections 40A(2)(a) and 69C of the Income-Tax Act, 1961. 20. On facts, when the appellant did not satisfy the requirements for claiming deductions, disallowance has to consequently follow. Thus, the disallowance of Rs. 4,73,345/- under the head, "Business Promotion Charges"and Rs. 13,90,620/- under the head, "Foreign Travel Expenditure", cannot be said to be said to be erroneous, both on law and facts. 21. In the light of the above discussions, the substantial questions of law, raised by the assessee, are answered against the assessee. Hence, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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