SHRENIK J. SHAH, MUMBAI V. CIT (A) 52,

ITA 1007/MUM/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92729 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2003-2004
• Appeal Filed On: 13-02-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K DHONDIAL
• Keywords: Unexplained cash credit; Business expenditure

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI ,!' , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.1007/MUM/2015 ASSESSMENT YEAR: 2003-04 SHRI SHRENIK J. SHAH, 1017, P.J. TOWERS, DALAL STREET, FORT, MUMBAI-400023 / VS. COMMISSIONER OF INCOME TAX (APPEALS)52, ROOM NO.619, 6 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 / ASSESSEE / REVENUE P.A. NO. ABSPS3090H $%& / ASSESSEE BY SHRI NISHIT GANDHI $%& / REVENUE BY SHRI A.K.DHONDIAL-CIT-DR / DATE OF HEARING 09/06/2015 & / DATE OF ORDER: 11/06/2015 &/ O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 31/12/2014 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE FIRST GROUND RAISED BY THE ASSESSEE PERTAINS TO CONFIRMING THE DISALLOWANCE MADE WITH REGARD TO INTEREST ON LO AN AND CREDIT CARD CHARGES DEBITED TO PROFIT & LOSS ACCOUN T TO THE EXTENT OF RS.50,273/-. THE CRUX OF ARGUMENT ADVANC ED BY SHRI NISHIT GANDHI, LD. COUNSEL FOR THE ASSESSEE, I S IDENTICAL ITA NO.1007/MUM/2015 SHRI SHRENIK J. SHAH 2 TO THE GROUND RAISED. IT WAS SUBMITTED THAT THE AS SESSING OFFICER DID NOT GRANTED RELIEF TO THE ASSESSEE IN S PITE OF DIRECTION GIVEN BY THE TRIBUNAL ON EARLIER OCCASION . ON THE OTHER HAND, SHRI A. K. DHONDIAL, LD. DR, DEFENDED T HE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. 2. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BR IEF, ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SHARE TR ADING. THE ASSESSEE WAS A STOCK BROKER AND WAS DECLARED A DEFA ULTER IN 1997 AND THEREAFTER LITERALLY LEFT OUT WITHOUT ANY BUSINESS. HE SLOWLY RECOVERED HIS POSITION AND DID SMALL TIME INVESTMENT IN SHARE MARKET. THE ASSESSEE CLAIM INT EREST ON LAND AMOUNTING TO RS.50,273/- IN HIS PROFIT & LOSS ACCOUNT. THE EXPENSES COMPRISES OF INTEREST ON PERSONAL LOAN AMOUNTING TO RS.1,85,834/- AND PERIODIC CREDIT CARD CHARGES. THE LOAN AMOUNT WAS USED FOR BUSINESS PURPOSES. IN MY OPINION, IF THE LOAN TAKEN HAS INCREASED, OBVIOUSLY , THE INTERESTS PAID ON SUCH LOAN ARE BUSINESS EXPENSES W HICH HAS TO BE ALLOWED. THE ASSESSEE INCURRED MAJORITY OF T HE EXPENSES LIKE CONVEYANCE AND TRAVELING FOR BUSINESS PROMOTION THROUGH THE CREDIT CARD. SINCE THE TRANS ACTION OF PAYMENT THROUGH CREDIT CARD ARE ACCOUNTED FOR IT HA S TO BE ALLOWED, MORE SPECIFICALLY WHEN, THE ASSESSEE PRODU CED THE RECORD BEFORE THE ASSESSING OFFICER THAT THERE WAS NOT OUTFLOW OF CASH AND THE LOAN TAKEN WERE UTILIZED FO R BUSINESS PURPOSES. THUS, THIS GROUND OF THE ASSESSEE IS ALL OWED. ITA NO.1007/MUM/2015 SHRI SHRENIK J. SHAH 3 3. THE NEXT GROUND PERTAINS TO CONFIRMING THE DISALLOWANCE WITH RESPECT TO TRAVELLING/CONVEYANCE EXPENSES INCURRED TO THE EXTENT OF RS.38,473/-. KEEPING IN VIEW, THE TOTALITY OF FACTS, AVAILABLE ON RECORD AND THE ASSE RTION MADE FROM BOTH SIDES, I REDUCED THE DISALLOWANCE TO RS. 19,000/-, BECAUSE, PERSONAL ELEMENT IS NOT RULED OUT, THUS, T HIS GROUND IS PARTLY ALLOWED. 4. THE NEXT GROUND PERTAINS TO CONFIRMING THE DISALLOWANCE WITH RESPECT TO TELEPHONE EXPENSES INC URRED TO THE EXTENT OF RS.11,770/-. ON APPRAISAL OF FACTS A ND THE ASSERTIONS MADE FROM BOTH SIDES AND ALSO PUT AN END TO THE LITIGATION, THE DISALLOWANCE IS REDUCED TO RS.5,000 /-, THUS, THIS GROUND IS ALSO PARTLY ALLOWED. 5. THE NEXT GROUND PERTAINS TO ADDITION OF RS.1,05,000/- AS UNEXPLAINED CASH CREDIT. IT WAS FO UND BY THE ASSESSING OFFICER THAT THERE WERE CERTAIN CASH RECEIPTS IN THE BOOKS OF ASSESSEE. DURING ORIGINAL ASSESSMENT THE ASSESSING OFFICER MADE THE ADDITION ON THE PLEA THA T THE ASSESSEE DID NOT EXPLAIN THE SOURCE OF SUCH CASH DEPOSITS/RECEIPTS. THE TRIBUNAL SEND THE MATTER BAC K TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO P RODUCE EVIDENCE. IT WAS CLAIMED BY THE ASSESSEE THAT HE W AS PAYING SOCIETY CHARGES IN RESPECT OF FLAT AT WORLI FROM HI S ACCOUNT ON BEHALF OF HIS WIFE, SMT. RUPA SHAH AND SUCH PAYMENT S WERE RETURN BY HER DURING THE YEAR, WHICH WERE SHOWN AS A RECEIPT IN CASH IN HIS CASHBOOK. THE ASSESSEE HAS ALSO FILE D COPIES OF ITA NO.1007/MUM/2015 SHRI SHRENIK J. SHAH 4 THE BALANCE-SHEET OF HIS WIFE AND BANK STATEMENT. T HE ASSESSING OFFICER MADE THE ADDITION DISCARDING THE DOCUMENTS FILED BY THE ASSESSEE. THE ASSESSEE FILE D THE COPY OF THE RETURN OF MS. RUPA SHAH, THUS, THIS GROUND I S REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE CLAIM OF THE ASSESSEE AND IF THE CLAIM OF THE A SSESSEE IS FOUND TO BE CORRECT, THE REQUIRED RELIEF MAY BE GRA NTED, OTHERWISE, DECIDE ON THE BASIS OF OUTCOME OF SUCH VERIFICATION. THIS GROUND IS ALLOWED FOR STATISTICA L PURPOSES. 6. THE LAST GROUND PERTAINS TO CONFIRMATION THE ADDITION OF RS.74,520/-. KEEPING IN VIEW, THE MATE RIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RES PECTIVE COUNSEL, AND TO PUT AN END TO THE LITIGATION, THE ADDITION IS REDUCED TO RS.20,000/-, CONSEQUENTLY, THIS GROUND I S PARTLY ALLOWED. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COUR T ON 11 TH JUNE 2015. SD/- (JOGINDER SINGH) !' / JUDICIAL MEMBER MUMBAI; DATED : 11/06/2015 F{X~{T? P.S / ! &$)!*+,&+-* / COPY OF THE ORDER FORWARDED TO : 1. '#$%& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. ) ) * ( '#$ ) / THE CIT, MUMBAI. ITA NO.1007/MUM/2015 SHRI SHRENIK J. SHAH 5 4. ) ) * / CIT(A)- , MUMBAI 5. -./ ' , ) '#$ ' 1 , / DR, ITAT, MUMBAI 6. /2 3$ / GUARD FILE. & / BY ORDER, (-# ' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI