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Income Tax Appellate Tribunal - Kolkata

Neozone Traders (P) Ltd., Kolkata vs Department Of Income Tax on 9 January, 2014

               आयकर अपीलीय अधीकरण, Ûयायपीठ - "C" कोलकाता,
    IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH: KOLKATA
(सम¢)Before ौी महावीर िसंह, Ûयायीक सदःय एवं/and ौी आॄाहाम ǒप.
                                                          ǒप. जाज[
                                                              जाज[, लेखा सदःय)
            [Before Shri Mahavir Singh, JM & Shri Abraham P. George, AM]
                       आयकर अपील संÉया / I.T.A No. 2124/Kol/2010
                            िनधॉरण वषॅ/Assessment Year: 2004-05

Income-tax Officer, Wd-7(1), Kolkata.          Vs.     Neozone Traders (P) Ltd.
                                                       (PAN:AABCN0682M)
(अपीलाथȸ/Appellant)                                    (ू×यथȸ/Respondent)

                       Date of hearing: 09.01.2014
                       Date of pronouncement: 27.01.2014

                       For the appellant: Shri Sadhan Bhattacharya, Addl. CIT, Sr. DR
                       For the respondent: Shri D. S. Damle

                                       आदे श/ORDER
Per Shri Mahavir Singh, JM:

This appeal by revenue is arising out of order of CIT(A), Central-II, Kolkata in Appeal No.206/CC-XIII/CIT(A)-C-II/Kol/06-07 dated 06.09.2010. Assessment was framed by Dy. CIT, CC-XIII, Kolkata u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") for Assessment Year 2004-05 vide his order dated 27.11.2006.

2. The only issue in this appeal of revenue is against the order of CIT(A) in deleting the disallowance of foreign travel expenses of Rs.15,39,730/-.

3. Briefly stated facts leading to the above issue are that the AO during the course of assessment proceedings noticed from the details of foreign travel expenses incurred by Director of the Company that these are not for the purpose of business. According to AO, for undertaking foreign travel exploring foreign markets for imported goods is not a business activity of the assessee Company. Accordingly, he disallowed this foreign travel expenditure of Rs.15,39,730/-. Aggrieved, assessee preferred appeal before CIT(A), who relying on the earlier year's decision allowed the claim of the assessee by observing in para 4 as under:

"4. I have gone through the assessment order and submissions of appellant. Assessing Officer has stated in the assessment order that the disallowance of foreign travel has been made by him because similar disallowances were made by the Assessing Officer in earlier Assessment Years. In Assessment Year 2002-03 a similar disallowance of foreign travel expenditure was deleted by my predecessor in appellate order dated 29.03.2007 in Appeal No.8CC-XIII/CIT(A)C-II/05-06 and the same order was followed in Assessment Year 2003-04 in appellate order dated 29.03.2007 in Appeal No. 12/CC-XIII/CIT(A)C- II/06-07. Therefore, following the orders of my predecessor, I direct the Assessing Officer to allow the foreign travel expenditure of Rs.15,39,730/- as business expenditure and reduce the total income of the appellant accordingly."

Neozone Traders (P) Ltd, AY:2004-05 Aggrieved, revenue came in appeal before us.

4. We have heard rival submissions and gone through facts and circumstances of the case. We find that the assessee undertook foreign travel for exploring foreign market for imported goods as per the Liberalised Exim Policy, Govt. of India. The assessee was in the process of importing and exporting of consumer goods and also to obtain import export code no. from the Joint Director General of Foreign Trade. In view of this, the assessee Company's Director had undertaken visits to Middle East and European countries to locate the source of consumer goods at a competitive rate. It was the claim of the assessee before the AO as well as CIT(A) that in view of the above reasons in order to explore the new possibilities in its trading business had incurred foreign travel expenses, which is for the purpose of business only. Even in the earlier year similar disallowance was deleted and the same has been accepted by revenue. In view of the above facts and circumstances, we confirm the order of CIT(A) deleting the disallowance. Appeal of revenue is dismissed.

5. In the result, appeal of revenue is dismissed.

6. Order is pronounced in the open court on 27.01.2014 Sd/- Sd/-

आॄाहाम ǒप.

        ǒप. जाज[
            जाज[, लेखा सदःय                                   महावीर िसंह, Ûयायीक सदःय
(Abraham P. George)                                                   (Mahavir Singh)
Accountant Member                                                   Judicial Member

                               Dated : 27th January, 2013

वǐरƵ िनǔज सिचव Jd.(Sr.P.S.)

आदे श कȧ ूितिलǒप अमेǒषतः- Copy of the order forwarded to:

1. अपीलाथȸ/APPELLANT - ITO, Ward-7(1), Kolkata 2 ू×यथȸ/ Respondent - Neozone Traders (P) Ltd., 216, A. J. C. Bose Road, Kolkata-17

3. आयकर किमशनर (अपील)/ The CIT(A), Kolkata

4. आयकर किमशनर/ CIT Kolkata

5. ǒवभािगय ूितनीधी / DR, Kolkata Benches, Kolkata स×याǒपत ूित/True Copy, आदे शानुसार/ By order, सहायक पंजीकार/Asstt. Registrar.