TMI Blog2017 (10) TMI 1251X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the financial year relevant to the assessment year under consideration. - Decided in favour of assessee Allowable business expenses - travelling expenses - Held that:- Since, the assessee has failed to justify that the travelling expenses was incurred wholly and exclusively for the business purposes before the authorities below and since no material was brought before us to substantiate its claim. We do not find merit in the appeal of the assessee. We therefore, uphold the findings of the Ld. CIT (A) and dismissed this ground of appeal of the assessee. - ITA No. 4772/Mum/2016 And ITA No. 4773/Mum/2016 - - - Dated:- 4-7-2017 - SHRI RAJENDRA, AM AND SHRI RAM LAL NEGI, JM For The Assessee : None For The Revenue : Ms. Arju Garodia ORDER PER RAM LAL NEGI, JM These appeals have been preferred by the assessee against two orders dated 30/03/2016 passed by the Ld. CIT (A)-9, Mumbai pertaining to the Assessment Years 2010-11 2011-12 respectively, whereby the Ld. CIT (A) has dismissed the appeals filed by the assessee against assessment orders passed by the AO under section 143(3) of the Income Tax Act, 1961(for short the Act.) Since, both the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (A):- 1. a. The Commissioner of Income Tax Appeal-9 (hereinafter referred as CIT ) has erred in confirming the disallowance of revenue expenses debited to the Profit Loss Account of the Appellant to the tune of ₹ 5,36,246/- (total disallowance of expenses of ₹ 12,98,261/- out of which the expenses to the extent of ₹ 7,62,015/- has already been disallowed by the Appellant in the Computation while filing the Return of Income and ₹ 1,52,170/- were admitted to have been remained to be disallowed in Computation of Income). b. Further, the CIT has failed to appreciate the submissions and explanations offered by the Appellant. Further, the CIT has erred in wrongly accepting the decision taken by learned assessing officer that there was no business activities carried on by the Appellant Company during the year under consideration. Break-up of expenses disallowed are as under: Professional Fess ₹ 79,996/- Travelling Lodging Expenses ₹ 1,21,991/- Taxes and Duties ₹ 7,105/- Bank Charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed by the assessee and the Ld. CIT (A) has rightly affirmed the action of the AO. Hence, there is no merit in the appeal of the assessee and the same is liable to be set aside. 7. We have gone through the entire record pertaining to this appeal including the orders passed by the authorities below. We do not find any evidence on record which establishes the assessee had carried out the business activities relating to the projects Hindon River Mills Project and Hydro Project, during the financial year relevant to the assessment year under consideration. The AO has specifically mentioned that from the notes to accounts and the WIP expenditure break up it is amply clear the expenses incurred on the projects are not on account of any factual constructions related activities and the same indicates that the project is in the preliminary stage and since the assessee has entered into a construction contract the entire expenditure is relatable to the work in progress. The Ld. CIT (A) has confirmed the disallowance made by the AO after considering the entire factual matrix of the case. The assessee did not produce any evidence even during the appellate proceedings to establish that busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h M/s Span Air Pvt. Ltd. only and failed to establish the expediency accordingly the AO disallowed 15% of the total expenses of ₹ 66,47,036/- and added the same to the income of the assessee. 2. Feeling aggrieved by the assessment order, the assessee carried the matter before the Ld. CIT (A). The Ld. CIT (A) after hearing the assessee confirmed the findings of the AO and dismissed the appeal of the assessee. The assessee is in appeal before the Tribunal against the impugned order passed by the Ld. CIT (A). 3. The assessee has raised the following effective grounds of appeal against the impugned order passed by the Ld. CIT (A):- 1. The Commissioner of Income Tax Appeal-9 (hereinafter referred as CIT ) has erred in confirming the contention of the Learned Assessing Officer in reducing the Cost of work in progress in respect of Hydro Project by an amount of ₹ 53,60,400/- which has been incurred on chartered flights through M/s Span Air Ltd. by considering the same as personal Expenses and not incurred for the wholly and exclusively for the purpose of business. It is submitted that such disallowance is made based on assumptions and presumptions and without con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject) by the assessee company 6. From the reply aforesaid it can be inferred that the assessee has failed to prove that the expenses of ₹ 53,60,400/- have been incurred wholly and exclusively for the business purpose and as per the provisions of section 37 (1) of the Act which contemplates that any expenditure not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee or expanded wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head Profits and gains of the business of profession. The Ld. CIT (A) has confirmed the action of the assessee holding as under: During the appellate proceeding also the appellant was required to explain and substantiate the genuineness of travelling expense with regard to the business purpose. It is seen that the appellant has incurred ₹ 53,63,400/- towards the charges related to the chartered flights and which has been capitalized by the appellant in Hydro Project. However, this action of the appellant to capitalize the amount of ₹ 53,63,400/- cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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