K'S Jewellery & Co, Mumbai vs Assessee

आयकर अपील य अ धकरण, मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES "A" MUMBAI सव ी आय.पी. बंसल, या यक सद य एवं ी राजे , लेखा सद य BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND

SHRI RAJENDRA, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.7495/MUM/2013 नधा रण वष /Assessment Year 2009-10 K.S. Jewellery & Co., बनाम/ Asstt. Comm. Of Income 221-A, Adarsh Indl. Estate, Tax 20(1), Vs. Sahar Road, Chakala, Piramal Chambers, Andheri(E), Lalbaug, Mumbai 400012. Mumbai - 400 099 थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AADFK 2394Q

(अपीलाथ /Appellant) .. ( यथ / Respondent)

Appellant by Shri Deepak K. Parekh Respondent by Shri Asghar Zain सनु वाई क तार"ख / Da te o f Hearing : 03/06/2015 घोषणा क तार"ख /Date of Pronouncement : 03/06/2015

आदे श / O R D E R

PER I.P.BANSAL, J.M:

This is an appeal filed by the assessee and it is directed against order passed by Ld. CIT(A)-31 Mumbai dated 21/11/2013 for assessment year 2009-

10. Grounds of appeal read as under:

"On the facts, circumstances and legality of the case, Hon'ble CIT (Appeals) -31 erred in confirming the disallowance of Travelling Expenditure of Rs.6,60,131/- made by the Assessing Officer.

2. At the outset, it was submitted by Ld. AR that the foreign travels expenses which are subject to disallowances were also subjected to tax in FBT return. To support such contention Ld. AR has submitted details of FBT paid 2 आयकर अपील सं. / ITA No.7495/MUM/2013 नधा रण वष /Assessment Year 2009-10

on FT expenses, copy of which was also given to Ld. DR. On these facts it was submitted that since foreign travel expenses have already been subjected to FBT, the same could not be disallowed under section 37 of the Income Tax Act, 1961 (the Act). To support such contention, reliance was placed on the decision of Tribunal dated 25/4/2013 in the case of Om Intercontinental vs. ACIT in ITA No.2310/Mum/2012 & 2311/Mum/2012, in which similar proposition was accepted and reference was made to the following observations of the Tribunal.

5. At the outset, it is the submission of Ld. A.R that both the expenses i.e. expenses on traveling and telephone etc. were subjected to FBT provisions. He submitted that though Ld. CIT(A) has not accepted such proposition of the assessee but Mumbai Tribunal in the case of Hansraj Mathuradas v. ITO vide decision dated 16/09/2011 in ITA No.2379/Mum/2010 has held that where the expenditure which are subjected to FBT cannot be disallowed under section 37(1) of the Income Tax Act, 1961(the Act) on the ground that these are not for the purpose of business.

6. On the other hand, Ld. DR relied upon the order passed by Ld. CIT(A).

7. We have heard both the parties and their contentions have carefully been considered. In the aforementioned decision in the case of Hansraj Mathuradas(supra), relying upon CBDT Circular No.8/2005 dated 29/8/2005 it was held that once FBT is levied on expenses incurred, it follows that the same are treated as fringe benefit provided by the assessee as employer to its employees and the same have to be appropriately allowed as expenditure incurred wholly and exclusively by the assessee for the purpose of its business. No contrary decision has been brought to our notice in this regard. Therefore, respectfully following the aforementioned decision we hold that if the aforementioned expenditure were subjected to FBT, then disallowance cannot be made. However, to verify that whether or not these expenditure were subjected to FBT, we restore the issues raised in these appeals to the file of AO with a direction to verify the contention of the assessee that whether or not impugned expenditure were subjected to FBT. If those expenditure were subjected to FBT then no disallowance can be made and the claim of the assessee should be accepted in its entirety. We direct accordingly.

8. In the result, for statistical purposes these appeals filed by the assessee are treated as allowed in the manner aforesaid.

Copy of order was placed on our record and was also given to Ld. DR.

3 आयकर अपील सं. / ITA No.7495/MUM/2013 नधा रण वष /Assessment Year 2009-10

3. On the other hand, Ld. DR relied upon the order passed by Ld. CIT(A).

4. We have heard both the parties and their contentions have carefully been considered. The assessee has submitted the details, according to which foreign travel expenses were subjected to FBT. Therefore, following the aforementioned decision, relevant observations of which have already been reproduced, we delete the addition and appeal filed by the assessee is allowed.

5. In the result, appeal filed by the assessee is allowed.

Order pronounced in the open court on 03/06/2015 आदे श क घोषणा खुले यायालय म) *दनांकः 03/06/2015 को क गई ।

Sd/- Sd/- ( राजे , / RAJENDRA) (आय.पी. बंसल / I.P. BANSAL) लेखा सद य / ACCOUNTANT MEMBER या यक सद य / JUDICIAL MEMBER मंब ु ई Mumbai; *दनांक Dated 03/06/2015

आदे श क त ल प अ!े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. आयकर आयु.त(अपील) / The CIT(A)- 4. आयकर आयु.त / CIT

5. /वभागीय त न1ध, आयकर अपील"य अ1धकरण, मुंबई / DR, ITAT, Mumbai

6. गाड फाईल / Guard file.

आदे शानुसार/ BY ORDER, स या/पत त //True Copy//

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मंब ु ई / ITAT, Mumbai व. न.स./Vm, Sr. PS