Income Tax Appellate Tribunal - Chennai
Dart Global Logistic P Ltd., Chennai vs Department Of Income Tax on 15 February, 2010
IN THE INCOME TAX APPELLATE TRIBUNAL
CHENNAI BENCH 'A'
BEFORE SHRI PRADEEP PARIKH, VICE-PRESIDENT
AND SHRI GEORGE MATHAN, JUDICIAL MEMBER
I.T.A. No. 653/Mds/2010
Assessment Year : 2006-07
The Asst. Commissioner M/s.Dart Global Logistic P.
Of Income-tax Vs. Ltd.,
Company Circle-I(4) 31 Velachery Road,
Chennai 34. Little Mount,
Saidapet, Chennai - 35.
PAN - AAACD 3181 G
(Appellant) (Respondent)
Appellant by : Shri Shaji P. Jacob
Respondent by : Shri Sundarraman
ORDER
PER PRADEEP PARIKH, V.P. The department is in appeal before us against the order of the ld. CIT(A), dated 15.2.2010 for assessment year 2006-07. First ground in the appeal is against the deletion of disallowance of expenditure incurred on behalf of the clients.
2. The assessee company is engaged in the business of freight forwarding. It returned a total income of ` 1,35,42,250/- for the year under consideration. It was found that air cargo/sea cargo handling expenses were set off from air freight/sea freight receipts. However, the expenses were not fully supported by proper bills and vouchers. Therefore, the Assessing Officer proposed to make certain disallowance out of the same expenses. The contention of the assessee was that since they were incurred on behalf of the clients and paid to the airways or the shipping companies, they were not debited to the profit and loss account and hence, nothing 2 ITA 653/10 could be disallowed. However, the Assessing Officer rejected the contention of the assessee and made a disallowance on estimate basis at 30%. While doing so, the A.O. had followed his earlier orders for assessment years 2001-02, 2002-03, 2003-04 and 2005-06. The CIT(A) deleted the addition by following the order of the Tribunal in the assessee's own case in ITA Nos.1574, 2030 & 2331/Mds/2006 dated 9.9.2009 for assessment years 2001-02, 2002-03 and 2003-04.
3. It is agreed by the parties that the issue is covered in favour of the assessee by the aforesaid order of the Tribunal and hence, respectfully following the same, we uphold the order of the CIT(A) deleting the disallowance made in the present year.
4. Second ground in the appeal is against the deletion of disallowance made on account of marketing fees paid to Dart Air Offshore Pvt. Ltd., Sri Lanka (DASOPL). The stand of the assessee was DASOPL which is its holding company had looked after the marketing activities of the assessee company which had enabled the assessee to do substantial business. However, the A.O. was not satisfied with the reasonableness of the expenditure and accordingly, disallowed the entire sum under sec.40A(2)(b) of the Income- tax Act, 1961 (the Act). Here also, the CIT(A) deleted the disallowance by following the earlier order of the Tribunal cited supra.
5. On this issue also, it is fairly agreed by the parties that the same is covered in favour of the assessee by the earlier order of the Tribunal cited in the preceding paragraph. Accordingly, the order of the CIT(A) is upheld.
6. In the result, the appeal of the department is dismissed.
3 ITA 653/10The order was pronounced in the court on 19.7.2010.
Sd/- Sd/-
(GEORGE MATHAN) (PRADEEP PARIKH)
JUDICIAL MEMBER VICE-PRESIDENT
Chennai,
Dated the 19th July, 2010
mpo*
Copy to : Appellant/Respondent/CIT/CIT(A)/DR