9911796707
TMI Blog2017 (5) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... y this common order. 3. First ground is that the ld.CIT(A) has erred in confirming the disallowance of China tour expenses amounting to Rs. 23,09,500/- in A.Y.2008-09 and Rs. 23,09,500/- for Switzerland tour expenses in Asstt.Year 2009-10 respectively. The facts on this issue are common on all vital points, therefore, for the facility we take up facts from the Asstt.Year 2008-09. 4. The assessee company derives income from business of dealers and commission agent of engineering products and servicing activities. It has filed its return of income electronically on 29.8.2008 and 29.9.2009 declaring total income at Rs. 14,56,66,218/- and Rs. 17,63,31,404/- in the Asstt.year 2008-09 and 2009-10 respectively. In the Asstt.Year 2008-09, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne through the record carefully. We find that in Asstt.Year 2007-08, the assessee has made a provision of Rs. 24,88,000/- relating to Egypt tour. This was disallowed by the AO and the disallowance was confirmed by the ld.CIT(A). The Tribunal has deleted the disallowance. The discussion made by the Tribunal reads as under: "ITA No. 1473/Ahd/2011 (Assessee's appeal) 9. Concised ground nos.1 & 2 of the assessee's appeal read as under: "1. That, on facts and in law, the learned CIT(A) has grievously erred in confirming the disallowance of Egypt tour expenses of Rs. 24,88,000/- 2. Alternatively, and without prejudice to above ground of appeal, the entire expense of Egypt tour be directed to the allowed in subsequent assessment year 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the other hand, relied upon the order of authorities below and he stated that neither the liability had accrued during the year nor the expenditure was actually incurred. The assessee claimed expenses simply on the basis of the provision made simply on estimate. He, therefore, submitted that the order of the CIT(A) on this point should be sustained. 11. We have carefully considered the arguments of both sides and perused the material placed before us. The relevant facts as recorded by Assessing Officer in the order read as under: "3.2 In response the assessee vide its letter dated 8.12.2009 has furnished the justification mainly in the form of comparative statement of sales promotion branch wise. On perusal of sales promotion of V. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rued in the year under consideration. The provision made had no basis and it was to depend largely on certain future events. The assessee has not explained any basis for the amount provided in its books .There is no past trend which can form the basis of such provision. The amount to be spent cannot be ascertained unless the willingness and availability of the persons are known, unless the trip duration is known, unless the Trip Organiser gives the estimate. So, the amount estimated and provided was nothing but merely a contingent liability and the same cannot be allowed. Penalty proceeding under section 271(l)(c) is initiated separately as the assessee has furnished inaccurate particulars of its income by claiming a liability which has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer to allow the deduction for the provision of Egypt tour expenses amounting to Rs. 24,88,000/-. Accordingly, ground no.1 of the assessee's appeal is allowed and consequentially ground no.2 of assessee's appeal has become infructuous. Same is rejected." 7. There is no disparity on facts. In the Asstt.Year 2008-09, the assessee has made a provision of Rs. 23,09,5000/-, but in actual it had incurred a sum of Rs. 47,77,500/- that is far more than the provision. This provision made by the assessee is based on the past experience and in the last three years, it was not required to write back the provision, on account of its non-user. Considering the order of the Tribunal in the assessee's own case for Asstt.year 2007-098, we allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or not, and if it has credit, then same be given to the assessee. No other issue was pressed in the Asstt.Year 2008-09. Accordingly, the appeal of the assessee for A.Y.2008-09 is partly allowed. 11. In the Asstt.year 2009-10, the next issue agitated by the assessee is that the ld.CIT(A) has allowed a sum of Rs. 23,09,500/- on payment basis. 12. The facts regarding this issue are that in the asstt.Year 2008-09, the assessee has made a provision of Rs. 23,09,500/- pertaining to the China Tour. This provision was disallowed by the AO in the Asstt.Year 2008-09. It has claimed this amount on actual payment basis in the Asstt.Year 2009-10. The ld.CIT(A) theoretically allowed, but with a rider that in case provision is allowed to the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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