M/S.sangeeta Impex v. Assistant Commissioner Of Income Tax,Central Circle - 24, Mumbai

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NOs. 1268, 1270 AND1317TO 1321 OF2008 M/s.Monika Gems, Mumbai ... Appellant(In all appeals) v/sAssistant Commissioner of Income-Tax,Central Circle - 24, Mumbai ... Respondent(in alls appeals) ALONGWITH INCOME TAX APPEAL NOs. 1269 & 1348 OF 2008 M/s.Sangeeta Impex ... Appellant(in all appeals) v/s Assistant Commissioner of Income Tax,Central Circle - 24, Mumbai. ... Respondent(in all appeals) ALONGWITHINCOME TAX APPEAL NOs. 1271, 1310, 1313 TO1316 OF 2008 M/s.Mahavir Corporation ... Appellant(in all appeals) v/sAssistant Commissioner of Income Tax,Central Circle-24, Mumbai.... Respondent(in all appeals) ALONGWITH INCOME TAX APPEAL NOs. 1322 TO 1325 OF 2008 M/s.Dineshkumar Jain ... Appellant(in all appeals) v/s Assistant Commissioner of Income Tax,Central Circle-24, Mumbai. ... Respondent(in all appeals) ALONGWITH INCOME TAX APPEAL NOs.1326 TO 1332 OF 2008Sanjay S. Jain ... Appellant(in all appeals) v/sAssistant Commissioner of Income Tax,Central Circle-24, Mumbai. ... Respondent(in all appeals) ALONGWITH INCOME TAX APPEAL NOs. 1336 TO 1341 OF 2008 Shantilal M. Jain ... Appellant(in all appeals) v/sAssistant Commissioner of Income Tax,Central Circle-24, Mumbai ... Respondent(in all appeals) ALONGWITH INCOME TAX APPEAL NOs. 1342 TO 1345 OF 2008 Omprakash K. Jain ... Appellant(in all appeals) v/sAssistant Commissioner of Income Tax,Central Circle-24, Mumbai ... Respondent(in all appeals) AND INCOME TAX APPEAL NOs. 1346 & 1347 OF 2008 M/s.Malay Gems ... Appellant(in both appeals) v/sAssistant Commissioner of Income Tax,Central Circle-24, Mumbai ... Respondent(in both appeals) Mr.Atul K. Jasani and Mr.S.S.Shetty for the appellantin all appeals. Mr.Y.P.Patki with Mr.B.M.Chatterji and Mr.P.S.Sahadevanfor the respondent in all appeals. P.C.: CORAM:F.I.REBELLO ANDR.S.MOHITE, JJ. DATED: 19TH JANUARY, 2009 1. All these appeals are being disposed of by thiscommon order. 2. These appeals are filed by the assessees on thefollowing questions of law:- circumstances of the case and in law theTribunal was justified in upholding the ad-hoc1/3 disallowance out of the Foreign Travelexpenses incurred by the appellant ? circumstances of the case and in law the orderof the Tribunal confirming the ad-hocdisallowance of 1/3 of Foreign Travel expensesmade by the assessing officer is perverse and/orcontrary to material on record inasmuch as itoverlooked the evidence filed by the appellantin support of the impugned expenses and theTribunal itself having come to the conclusionthat it is not possible to make any ad-hocdisallowance in expenses of this nature ? 3. It is not necessary to set out the facts in detailin view of the order to be passed. 4. The Assessing Officer proceeded on the footing thatthe persons in respect of whom the allowance was sought,are not the employees of the assessees. After soholding, the Assessing Officer has disallowed 1/3rd ofthe expenses incurred. The order of the A.O. wasupheld by the C.I.T.(A). The matter thereafter went inappeal. The Tribunal, in the impugned order, insofar asthe issue is concerned, in para 29, proceeded on thefooting that the expenses of this nature can either beallowed or disallowed. After having so sought, theTribunal thereafter proceeded to uphold the disallowanceof 1/3rd of the expenses. In our opinion, this was atotal misdirection in law. The expenses incurred caneither be in the course of the business or not relatedto the assessee’s business. To that extent the findingsare totally erroneous and consequently the order willhave to be set aside. 5. The submission made on behalf of the appellant isthat these are expenses incurred on what are known asForeign Travel Expenses. In the industry, there arefree lancers who are known as asseessees, who arenormally, as per the practice, go to the foreign countryfor and on behalf of the assessees to assess thediamonds. In these facts and circumstances the expenditure is allowable. 6. We do not want to record any findings on that issue,but to that extent set aside the orders and remand thematter to the A.O. for deciding the issue afresh. Itwill be open to the assessees to lead additionalevidence to which they are entitled to. 7. In the light of that, the issues framed will not beanswered. 8. All questions are left open for consideration beforethe Assessing Officer. (R.S.MOHITE, J.) (F.I.REBELLO, J.)