NILESH TALSANIA, MUMBAI V. ITO 19(2)(4), MUMBAI

ITA 1027/MUM/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3276 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 05-01-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 06-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MISHRA
• Keywords: Business expenditure; Principle of natural justice
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUM BAI BEFORE SHRI AMIT SHUKLA, JM AND SHRI RAJESH KUMAR, AM ./ I.T.A. NO 1027/MUM/2013 ( / ASSESSMENT YEAR: 2006-07) NILESH R. TALSANIA KAMLESHWAR, 5 TH FLOOR, TAGORE ROAD, SANTACRUZ (W), MUMBAI-400 054. / VS. ITO 19(2)(4) 3 RD FLOOR, PRIMAL CHEMBERS PAREL, MUMBAI-400 012. ./ ./PAN/GIR NO. ACEPT 7071N ( /APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENT BY : SHRI S.K. MISHRA / DATE OF HEARING : 05/01/2016 !'# / DATE OF PRONOUNCEMENT : 29/01/2016 $% / O R D E R PER RAJESH KUMAR, A. M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 06.12.2012 OF COMMISSIONER OF INCOME TAX (APPEALS)-11, MUMBAI (HE REINAFTER CALLED AS THE CIT(A)) FOR ASSESSMENT YEAR 2006-07. THE ASSESSEE H AS RAISED THE FOLLOWING GROUNDS OF APPEAL: 2 ITA NO. 1027/MUM/2013 (A.Y. 2006-07) NILESH R. TALSANIA VS.ITO 1. THE LEARNED CIT(A) ERRED IN DISALLOWING THE LEGITI MATE BUSINESS EXPENSES INCURRED WITHOUT TAKING INTO CONSIDERATION THE MATE RIAL AVAILABLE ON RECORD AND FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE CIT(A) ERRED IN SUSTAINING THE UNJUST AND UNFAI R ADDITION MADE TO THE TOTAL INCOME OF THE APPELLANT BY DISALLOWING TOTAL EXPENSES OF RS.19,70,978/- LEGITIMATELY CLAIMED BY THE APPELLANT UNDER DIFFERE NT HEADS OF ACCOUNTS. 3. THE CIT(A) ERRED IN NOT TAKING THE COGNIZANT OF THE FACT THAT THE APPELLANTS CA, SHRI KAMLESH. B. SHAH WAS SUFFERING FROM ILL HE ALTH DUE TO MASSIVE HEART ATTACK WHICH EVENT TOOK PLACE IN AUGUST 2011 AND THEREAFTER THE APPELLANT, AUTHORIZED REPRESENTATIVE HAD UNDERGONE ORTHOPEDIC SURGERY IN THE MONTH OF MARCH 2012 AND WAS BEDRIDDEN ALMOST FO R 6 MONTH AND THIS FACT WAS BROUGHT TO THE NOTICE OF CIT(A)-II VIDE AP PELLANTS AUTHORIZED REPRESENTATIVE LETTERS FILED WITH THE OFFICE OF CIT (A) ON 16.04.2012 AND 24.08.2012 RESPECTIVELY. 4. THE CIT(A) ERRED IN NOT DECIDING THE APPEAL ON THE MERITS OF THE CA3 AND IN THE INTEREST O NATURAL JUSTICE EQUITY AND GOOD CONS CIENCE. 5. THE APPELLANT PRAYS THAT HE SHOULD GIVEN ONE MORE O PPORTUNITY TO REPRESENT HIS CASE IN JUST AND PROPER MANNER AND TO PLACE ON RECORD THE MATERIAL AVAILABLE WITH HIM WHICH IS CRUCIAL/DECIDING FACTOR FOR THE OUTCOME OF THE APPEAL. 2. AT THE OUTSET WE WOULD LIKE TO MENTION THAT DURI NG THE COURSE OF HEARING NEITHER THE ASSESSEE NOR HIS AUTHORIZED REPRESENTATIVE WAS PRES ENT TO ATTEND AND ARGUE THE CASE DESPITE RPAD NOTICES SERVED ON 27.10.14 & 17.0 6.15 WHICH MEANS THAT ASSESSEE IS NOT INTERESTED IN PROSECUTING HIS APPEA L. WE, THEREFORE, DISPOSE OFF THE SAME ON MERIT AFTER HEARING THE DEPARTMENTAL REPRES ENTATIVE. WE FURTHER NOTE THAT ASSESSEE DID NOT REPLY TO THE OPPORTUNITY OF HEARIN G BY THE AO DURING THE REMAND PROCEEDING ALSO. THE BRIEF FACTS OF THE CASE ARE TH AT THE ASSESSEE FILED HIS RETURN OF INCOME ON 31/10/2006 DECLARING TOTAL INCOME OF RS.7 9,639/- ALONG WITH THE AUDIT 3 ITA NO. 1027/MUM/2013 (A.Y. 2006-07) NILESH R. TALSANIA VS.ITO REPORT AS REQUIRED U/S 44AB OF THE ACT. THE CASE OF THE ASSESSE WAS SELECTED FOR SCRUTINY AND STATUTORY NOTICES U/S 143(2) & 142(1) WERE DULY SERVED ON THE ASSESEE. THE ASSESSEE WAS PROPRIETOR OF M/S. VARDHAMAN DIAMO ND WHICH WAS ENGAGED IN THE BUSINESS OF LABOUR CONTRACT WORK. THE LD. AO CO MPLETED THE ASSESSMENT AT RS.22,28,200/- VIDE ORDER DATED 29.12.08 U/S 143(3) OF THE ACT BY MAKING ADDITION OF RS. 21,48,560/- TO THE RETURN OF INCOME. THE LD. CIT(A) CONFIRMED THE ADDITION OF RS.19,70,978/- BY DIRECTING THE AO TO DISALLOW 10% OF OTHER EXPENSES IN PLACE OF 1,40,194/- AND DELETE THE ADDITION OF RS.1,07,44 0/- ON ACCOUNT OF LATE PAYMENT OF EPF AND THEREBY PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 3. WE HAVE HEARD THE DEPARTMENTAL REPRESENTATIVE AN D PERUSED THE MATERIAL ON RECORD. AFTER GOING THROUGH THE ORDER OF THE FIRST APPELLATE AUTHORITY, WE FIND THAT THE CIT(A) HAD PASSED THE ORDER AFTER TAKING INTO A CCOUNT THE WRITTEN SUBMISSION FILE BY THE ASSESEE. EVEN ON MERIT THE CIT(A) HAD D ISCUSSED THE VARIOUS ISSUES RAISED BY THE ASSESSEE AS HAS BEEN OBSERVED UNDER I N PARA 10&17 OF THE APPEAL ORDER WHICH IS REPRODUCED BELOW. 10. SUBSEQUENTLY, DURING APPEAL ALSO NO FURTHER SU BMISSION HAVE BEEN MADE. THEREFORE, DISALLOWANCE OF THE SALA RY BY THE AO IS HEREBY UPHELD AND THE 2 ND GROUND IS HEREBY DISMISSED. 4 ITA NO. 1027/MUM/2013 (A.Y. 2006-07) NILESH R. TALSANIA VS.ITO 17. ASSESSEE HAS ALSO FAILED TO PRODUCE ANY EVI DENCE THAT THE ACCOUNTING CHARGES WERE PAID TO SHRI. VISHAL SOLANK I AS SALARY AND IN ANY CASE SALARY EXPENSES ARE SEPARATELY DEBI TED IN THE ACCOUNTS FOR WHICH SEPARATE DETAILS HAVE ALREADY BE EN FURNISHED. HENCE, ADDITION MADE BY THE AO U/S40(A)(IA) IS HERE BY UPHELD AND BOTH THESS GROUNDS ARE DISMISSED. 4. IN VIEW OF THE ABOVE WE UPHELD THE ORDER OF CIT( A) AS NOTHING HAS BEEN BROUGHT BEFORE US TO CONTROVERT THE FINDING OF THE CIT(A). 5. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 29TH JANUARY, 2016 SD/- SD/- (AMIT SHUKLA) (RAJESH KUMAR) &' $ / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER ( ) MUMBAI; *$ DATED :29.01.2016 PS. ASHWINI / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT CONCERNED 5. ./0 ''12 , 12# , ( ) / DR, ITAT, MUMBAI 6. 045 6 / GUARD FILE / BY ORDER, 5 ITA NO. 1027/MUM/2013 (A.Y. 2006-07) NILESH R. TALSANIA VS.ITO / !'# (DY./ASSTT. REGISTRAR) #$ %, ( ) / ITAT, MUMBAI