I . T. . N o. 2 0 3 3 / KO L . / 2 0 1 4 Assessment year: 2010-2011 Page 1 of 6 IN INCOME TAX APPELLATE TRIBUNAL, KOLKATA C(SMC) BENCH, KOLKATA Before Shri P.M. Jagtap, Accountant Member I.T .A. No. 2033/KOL/ 2014 Assessment Year: 2010-2011 M/s. Bhattar Silver & Jewels (P ) Limi ted,...............................Appellant 5, Camac Street, Kolkata-700 071 [PAN: AABCB 1870 F] -Vs.- Income Tax Officer,...........................................................Respondent Ward-5 (3), Kolk ata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700 069 Appearances by: Shri Subash Agarwal , Advocate, for assessee Shri Rajat Kumar Kureel, JCIT, D.R., for Department Date of concluding th e hearing : Au gust 04 2016 Date of pronouncing order : October 04, 2016 O R D E R This appeal filed by assessee is directed against order of ld. Commissioner of Income Tax (Appeals)-VI, Kolkata dated 25.08.2014 for assessment year 2010-11. 2. issue raised in Ground No. 1 (as revised) relates to disallowance of Rs.2,20,000/- made by Assessing Officer and confirmed by ld. CIT(Appeals) on account of assessee s claim for expenses incurred on supply of snacks and foods. 3. assessee in present case is Company, which is engaged in business of Making and Trading of Diamond, Gold & Silver Ornaments. return of income for year under consideration was filed by it on 29.09.2010 declaring total income of Rs.5,46,937/-. In I . T. . N o. 2 0 3 3 / KO L . / 2 0 1 4 Assessment year: 2010-2011 Page 2 of 6 Profit & Loss Account filed along with said return, sum of Rs.2,87,260/- was debited by assessee on account of business promotion expenses. said expenses claimed by assessee were inclusive of sum of Rs.2,20,000/- paid by assessee to M/s. Rilton International for supply of snacks and foods. In this regard, explanation offered by assessee before Assessing Officer was that different schemes were framed by it from time to time for business promotion, which involved get together of customers every month and expenses in question were incurred for providing snacks and foods to customers during such get together. This explanation of assessee was not found acceptable by Assessing Officer and he proceeded to disallow expenses of Rs.2,20,000/-claimed by assessee for following reasons given in assessment order:- (a) That although assessee claimed that bills were raised for alleged catering service by concern [M/s Rilton International] throughout year (during each month), bill was raised only on 31-03-2010. (b) That although there is twelve dates mentioned in bill, there is no break up of bill amount for each date. (c) That there is no detail in bill to justify submission of AIR of assessee that catering services were provided by alleged concern in each month and even place where alleged catering service was provided is also not mentioned in bill to justify claim. (d) That there is no details of specific foods or snacks supplied nor there any rate [of per plate or per head] or quantity [or No. of dish or plate] against each date. (e) That it is very much impractical & unreasonable for caterer to raise bill for twelve different dates throughout year, only at end of year and that is also consolidated bill without any break up or details. (f) That alleged bill is also unpaid during F.Y. 2009-10. (g) That assessee itself failed to furnish details of specific foods or snacks supplied by caterer or rate [of per plate or per head] or quantity [or No. of dish or plate] against each I . T. . N o. 2 0 3 3 / KO L . / 2 0 1 4 Assessment year: 2010-2011 Page 3 of 6 date and even amount of bill against each date to justify its claim. (h) That assessee or its AIR failed to file any evidence to justify their claim of existence of alleged scheme or alleged gathering of customer or alleged catering service . On appeal, ld. CIT(Appeals) confirmed said disallowance. 4. I have heard arguments of both sides on this issue and also perused relevant material available on record. Although ld. counsel for assessee has reiterated before me submissions made by assessee on this issue before authorities below, I find that specific adverse findings/observations recorded by Assessing Officer on verification of relevant evidence filed by assesese in form of one bill issued by M/s. Rilton international are sufficient to show that there was failure on part of assessee to establish on evidence that expenditure in question was wholly and exclusively incurred for purpose of its business. claim of assessee of having promoted different schemes of business promotion and having organized get together of customers every month is also not supported by any cogent or convincing evidence. I, therefore, find no infirmity in impugned order of ld. CIT(Appeals) confirming disallowance made by Assessing Officer on this issue and upholding same, I dismiss Ground No. 1 of assessee s appeal. 5. In Ground No. 2, assessee has challenged action of ld. CIT(Appeals) in sustaining disallowance of 50% made by Assessing Officer out of tour and travel expenses to extent of 25%. 6. Under head of business promotion expenses, sum of Rs.67,260/- was claimed by assessee on account of tours and travels undertaken by its Directors and other persons for exhibitions. Before Assessing Officer, assessee, however, could not establish business I . T. . N o. 2 0 3 3 / KO L . / 2 0 1 4 Assessment year: 2010-2011 Page 4 of 6 expediency of said expenditure. Assessing Officer also found many shortcomings and anomalies in claim made by assessee on this issue as specifically pointed out on pages 3 & 4 of assessment order. Accordingly, he held that claim of assessee for expenditure incurred on tours and travels was not fully verifiable and made disallowance of Rs.33,630/- being 50% of total expenses claimed by assessee. On appeal, ld. CIT(Appeals) upheld action of Assessing Officer in making disallowance on account of tours and travels expenses in principle after having found that son of one of Directors of assessee, who was not even employee of assessee- company, had also undertaken travel. He, however, considered disallowance of 50% made by Assessing Officer to be excessive and restricted same to 25%. 6. I have heard arguments of both sides on this issue and also perused relevant material available on record. It is observed that disallowance out of expenses claimed by assessee on tours and travels was made by Assessing Officer after having found many discrepancies in claim made by assessee for such expenses. Keeping in view these discrepancies specifically pointed out by Assessing Officer, ld. CIT(Appeals) also agreed in principle that disallowance out of expenses claimed by assessee on tours and travels was warranted in facts and circumstances of case. Having considered all facts and circumstances of case, I am of view that disallowance sustained by ld. CIT(Appeals) to extent of 25% of total expenses is quite fair and reasonable and there is no case for giving any further relief to assessee on this issue. Ground No. 2 is accordingly dismissed. 7. As regards issue involved in Ground No. 3 relating to disallowance of Rs.35,500/- made by Assessing Officer and confirmed by ld. CIT(Appeals) under section 40A(3) of Act, ld. counsel for assessee has submitted that amount of Rs.35,500/- in question I . T. . N o. 2 0 3 3 / KO L . / 2 0 1 4 Assessment year: 2010-2011 Page 5 of 6 having been deposited by assessee directly in Bank account of concerned vendor, no disallowance under section 40A(3) is called for in view of decision of Hon ble Gujarat High Court in case of Anupam Tele Services vs.- ITO (Tax Appeal No. 556 of 2013 dated 22.01.2014). This issue thus is squarely covered in favour of assessee by said decision of Hon ble Gujarat High Court and respectfully following same, we delete disallowance made by Assessing Officer and confirmed by ld. CIT(Appeals) on this issue under section 40A(3) of Act. 8. As regards issue involved in Ground No. 4 relating to addition of Rs.20,000/- made by Assessing Officer and confirmed by ld. CIT(Appeals) on account of advance received by assessee treating same as its undisclosed income, no material argument has been advanced on behalf of assessee at time of hearing before me to take different view on this issue. I, therefore, uphold impugned order of ld. CIT(Appeals) confirming addition made by Assessing Officer on this issue and dismiss Ground No. 4. 9. In result, appeal of assessee is partly allowed. Order pronounced in open Court on October 04, 2016. Sd/- (P.M. Jagtap) Accountant Member Kolkata, 4 t h day of October, 2016 Copies to : (1) M/s. Bhattar Silver & Jewels (P ) Limi ted, 5, Camac Street, Kolkata-700 071 (2 ) Income Tax Officer, Ward-5(3 ), Ko lkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700 069 I . T. . N o. 2 0 3 3 / KO L . / 2 0 1 4 Assessment year: 2010-2011 Page 6 of 6 (3) Commissioner of Income Tax(Appeals)-VI, Kolkata; (4) Commissio ner of Income Tax- , (5) Depart ment al Represent ative (6) Guard File By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S. M/s. Bhattar Silver & Jewels (P) Limited v. Income-tax Officer, Ward-5(3), Kolkata