TaxTMI 
TaxTMI 
2016 (7) TMI 397
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....isallowance of foreign tour expenses being of personal nature. (Para 12 to page 19 of CIT(A)'s order). Grounds of revenue's appeal:- "In view of the facts and circumstances of the case, the Ld. CIT(A), Ajmer has erred in : 1. Restricting the addition to Rs. 22,01,740/- as against the addition of Rs. 44,03,479/- made by the AO on a/c of income from Chitrakoot & Panchwati, without appreciating the facts of the case; 2. Deleting the addition of Rs. 1,30,412/- made by the AO on a/c of purchases, without appreciating the facts of the case; 3. Deleting the addition of Rs. 27,000/- made by the AO on a/c of interest on advances, without appreciating the facts of the case; 4. Deleting the addition of Rs. 2,43,800/- made by the AO on a/c of Capital introduction, without appreciating the facts of the case." First we take assessee's appeal 2. Brief facts of the case are that the assessee is an individual and his main source of income is rental income and he is also engaged in running restaurant under the name and style M/s mango Masala. The assessee filed his return for the year under consideration on 26/2/2011 declaring total income of Rs. 19,62,030/-. The case was sel....
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....us properties let out by the assessee based on submeter reading in these premises, is not supported by the any evidence. However, no such evidence in support of the recovery made by the appellant is on record. Further, no basis has been given for allocating the power expenses amongst the various properties owned by the assessee which have been let out for various purposes. So, the power expenses allocated against the restaurant receipts are not verifiable. In view of above discussions and submissions of the appellant, the addition made by the AO of Rs. 79,440 is confirmed." 4. Now the assessee is in appeal before us. The ld AR of the assessee has submitted that the properties where the electric meters were installed and the power was consumed belonged to the family of the assessee and their names are appearing in the bills. It was also the case of the assessee that sub-meters were installed in the premises and based on the reading recorded in the Sub-meters, the cost of electricity was recovered from tenants. It was also admitted that the ld Assessing Officer has accepted the rental income of Rs. 24,39,000/- in the books of account of the assessee . However, had wrongly disallow....
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....rs and caterers who provide services to the parties in Chitarkoot Land. viii. Name of employees who look after activities of Chitrakoot Land and take orders from the customers or other persons and book the orders. 7.1 The ld Assessing Officer on the basis of local inputs, at the back of the assessee, has deputed the Inspector to furnish a report. The Inspector has furnished report on 18/3/2013 to the following effect:- श्रीमान् मैंने आपके निर्देशानुसार श्री सिद्धार्थ गोयल के केस में इंडिया मोटर सर्कित स्थित समारोह स्थल चित्रकूट व पंचवटी के आसप....
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....#2361;ाॅल है जिसका एक दिन का किराया करीबन पन्द्रह बीस हजार रूपये है। यह दोनों समारोह स्थल वर्ष में करीबन पाँच छः महीने बुक रहते हैं। रिर्पोट प्रस्तुत है। 7.2 The ld Assessing Officer on the basis of this report has concluded the assessment proceedings on 25/3/2013 without affording any opportunity and without appreciating the report of the Inspector. The conclusion mentioned by the ld Assessing Officer in the report as under:- It is heard from the market that Chitrakoot la....
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....regarding constructed area and Panchawati plot before the information was gathered by the Circle Inspector. During appeal, the assessee has merely pointed out that income from Panchawati party plot is also included in the income offered for tax of Rs. 36,521. It is also noted that the assessee has claimed Rs. 53,579 as municipal taxes against the cash receipts of Rs. 90,100 which shows that the receipts shown are on the lower side. As regarding the assessee's contention that there is no requirement of names and addresses of the parties from whom the receipts have accrued on account of arranging various functions at these venues. However, onus lies on the assessee to support the actual receipts from various persons by way of proper documentation which should be verifiable. In the copy of account submitted during appeal, assessee has merely mentioned the lump sum amount of cash receipts on monthly basis. From the same it cannot be verified whether it represents the actual receipts accruing to the assessee from various functions organized at these places. As regarding non supply of the inspector's report to the appellant, it may he mentioned that the same has been obtaine....
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....arking problems & other vocational disadvantage the big parties cannot be celebrated there. (d) The A.O. has not able to site any "live example" to justify his estimation. If assessee was not submitting the details at least the staff of restaurant could have been summoned for verification, but A.O. to avoid the facts & truth has avoided this procedure & has made his own assumptions and presumptions. (e) Even in past the AO's have accepted the "accounting method" & "books & records" of assessee u/sec. 143(3) of Income Tax Act, 1961 & no deviation in method of accounting noticed by A.O. (Refer order for assessment year 2009-10). (f) The A.O. is also not in position to justify his claim of income since no parallel assets / investments found or detected by A.O. (g) Further the A.O. has also taken plea that on receipts as issued for "land rent" no proper address or identify of party is there. It was intimated to A.O. that there is no such provision in law & since the money is received in advance thus we do not require any identify, address of said party, on due date & on production of counterpart the place can be utilized. (h) The inspector's report dated 18.03.2013. on w....
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....he entire report was only on the basis of hearsay inquiry conducted by the Inspector. Neither the name nor the addresses, nor the allocation nor any such entity about the property was gathered by the Inspector. From perusal of the earlier order, which is reproduced hereinabove, the ld Assessing Officer had based his finding on the misleading of the report of the Inspector. If he closely read the report, in the report, the Inspector has given the description of rent as under:- "He has also reported that enquiry revealed that rent in the range of Rs. 40,000/- to Rs. 50,000/- is charged for Chitrakoot land and three halls and Rs. 10,000/- for Panchwati Plot and a big hall for a day. Rooms are air conditioned and well furnished." The whole case before us, which was decided by the ld Assessing Officer as well as the ld CIT(A) was to find out the rate of rent on which the plots were given by the assessee on rent basis. In fact the Inspector has given rate of rent in respect of plots as well as for the party halls/ air conditioned rooms. Thus, in our view, the report can not to be relied upon for any purposes. The ld Assessing Officer has relied upon the report and has concluded tha....
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....holly for the purposes of business and is of revenue nature and not for personal purposes. The nature of business of assessee 'RESTAURENT' is such that if the new innovation and presentations not introduced the business cannot be promoted and thus it is necessary to attend various places including various foreign trips to innovate the ideas new developments and presentation to keep phase in the business and thus all such expenses as incurred are in "BUSINESS EXPEDIENCY". He relied on the following decision:- (i) CIT V/s Indian Molasses Co. P Ltd (1970) 78ITR 474 (SC) (ii) CIT V/s J.K. Coton Manufactror Ltd. (1975) 101 ITR 221 (SC) (iii) CIT V/s Seassoon J. David W. P. Ltd (1979) 118 ITR 261 (SC) He further submitted that the Ld. CIT(A) has also reiterated the same view of A.O. that whether such foreign expenses were incidental to the business of assessee & since no details of place visited and business procured filed hence disallowed the expenses. Whereas the ledger copy & bills & voucher itself justify the place visited. There is not necessity that to claim on expenditure in business expediency; immediate returns / business should have been received. The purpose of....