TMI Blog2017 (5) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal allowed - decided partly in favor of assessee. - ITA No.2010/Ahd/2012, ITA No.354/Ahd/2013 - - - Dated:- 1-5-2017 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER For The Assessee : Shri M.K. Patel, AR For The Revenue : Shri K. Madhusudan, Sr.DR ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: Present two appeals are directed at the instance of the assessee against orders of the ld.CIT(A) dated 11.6.2012 and 27.11.2012 passed for the Asstt.Years 2008-9 and 2009-10 respectively. 2. The issues disputed in these appeals are identical therefore, we heard them together and deem it appropriate to dispose of them by this common order. 3. First ground is that the ld.CIT(A) has erred in confirming the disallowance of China tour expenses amounting to ₹ 23,09,500/- in A.Y.2008-09 and ₹ 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout prejudice to above ground of appeal, the entire expense of Egypt tour be directed to the allowed in subsequent assessment year 2008-09. 10. At the time of hearing before us, it is submitted by the learned counsel that during the year under consideration, the assessee had arranged a Sales Promotion Scheme for its clients, sub-commission agents and Engineers etc. As per such Scheme, the persons who achieved the target were entitled to Egypt tour. That on the basis of performance, during the accounting year relevant to assessment year under consideration tour was arranged next year. That the Assessing Officer disallowed the provision made towards the tour expenses on the only ground that the liability has not been accrued because the tour was actually arranged in the next year. He stated that the tour was on the basis of performance of the assessee s clients, sub commission agents, Engineers etc. during the year under consideration. Therefore, the liability of the assessee to take them on tour has accrued during the year under consideration. He also stated that Assessing Officer has neither doubted the genuineness of the expenses nor that the expenses had been incurred f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, the actual trip and everything took place in the subsequent year. 3.5 On perusal of the aforesaid facts, it is found the amount of ₹ 24,88,000/- represents merely a provision as on 31.3.2007. The tour was arranged in the subsequent year. The said provision was made on ad-hoc basis and the liability has not accrued 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 accrued and crystallized during the year. From the above, it is evident that the Assessing Officer has not doubted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of Egypt tour. It is pertinent to observe that this was a provision made in the Asstt.year 2007-08. It was disallowed by the AO and the disallowance was confirmed by the ld.CIT(A). On appeal, the Tribunal has allowed this disallowance. This amount was allowed in Asstt.Year 2007-08 itself. No question of its allowance again in Asstt.Year 2008-09 arose. Keeping in view this aspect, the ld.counsel for the assessee did not press this ground of appeal. Hence, it is rejected. 9. Next issue agitated in Asstt.Year 2008-09 is that the ld.AO did not grant credit of TDS amounting to ₹ 20,34,335/-. When this aspect brought to the notice of the ld.CIT(A), the ld.CIT(A) has observed that this disallowance was made in an intimation made to the assessee under section 143(1) of the Act. It is not subject matter of assessment order under section 143(3) of the Act. Therefore, the ld.CIT(A) did not entertain this issue. 10. On due consideration of the facts, we are of the view that this aspect ultimately goes to affect taxability of assessee. If the assessee is entitled for TDS credit, then it ought to have been given. We set aside this issue to the file of the AO. The AO shall verify ..... X X X X Extracts X X X X X X X X Extracts X X X X
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