MUKESH INDRAJIT MUNIM, MUMBAI V. ITO WD 16(2)2, MUMBAI

ITA 1121/MUM/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3646 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 29-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 16-02-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SRIDHAR E
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE S/SHRI B.R. BASKARAN (AM) & AMIT SHUKLA (JM) I.T.A. NO. 1121 /MUM/ 2012 (ASSESSMENT YEAR 2008 - 09 ) MR. MUKESH INDRAJIT MUNIM 17, LAWYER S CHAMBERS 1 ST FLOOR, PICKET ROAD R.S. SAPRE MARG MUMBA I - 400 002. VS. ITO WARD 16(2)(2) MUMBAI. ( APPELLANT ) ( RESPONDENT ) PAN NO . AFOPM0569D ASSESSEE BY MS. AARTI VISSANJI DEPARTMENT BY SHRI SRIDHAR E. DATE OF HEARING 11.4 . 201 6 DATE OF PRONOUNCEMENT 20 . 5 . 201 6 O R D E R PER B.R. BASKAR AN, A M : - THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 9.12.2011 PASSED BY LEARNED CIT(A) - 27, MUMBAI AND IT RELATES TO A.Y. 2008 - 09. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LEARNED CIT(A) IN CONFIRMING THE DISALLOWANCE OF PROFESSIONAL EXPENSES OF RS. 5.56 LAKHS CLAIMED BY THE ASSESSEE. 3. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE IS A FREELANCING PHOTOGRAPHER. THE ASSESSING OFFICER NOTICED THAT TH E ASSESSEE HAS SHOWN A REVENUE OF RS. 5,505/ - ONLY FROM PHOTOGRAPHY, AGAINST WHICH HE HAD CLAIMED EXPENSES TO THE TUNE OF RS. 5,64,622/ - . THE ASSESSING OFFICER TOOK THE VIEW THAT THE EXPENSES INCURRED TOWARDS STATIONERY AND ART MATERIAL AMOUNTING TO RS. 7, 8 80/ - CAN ALONE BE TAKEN AS THE E XPENSES RELATING TO TH E PROFESSION OF THE ASSESSEE. ACCORDINGLY HE HELD THAT REMAINING EXPENSES CLAIMED BY THE ASSESSEE CANNOT BE ALLOWED AS DEDUCTION AND ACCORDINGLY DISALLOWED A SUM OF RS. 5.56 LAKHS. LEARNED CIT(A) ALSO TOOK THE VIEW THAT THE MR. MUKESH INDRAJIT MUNIM 2 EXPENSES CLAIMED BY THE ASSESS EE ARE IN THE NATURE OF PERSONAL EXPENSES AND ACCORDI NGLY CONFIRMED THE DISALLOWANCE. 4. LEARNED COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED THAT THE EXPENSES CLAIMED BY THE ASSESSEE INCLUDED DEPRECIATION CLAIM OF RS. 2,28,365/ - WHICH PERTAIN TO ASSETS R ELATING TO THE BUSINESS CARRIED ON BY THE ASSESSEE. LEARNED AR FURTHER SUBMITTED THAT OTHER EXPENSES INCURRED BY THE ASSESSEE ARE RELATED TO THE BUSINESS OF THE ASSESSEE ONLY . LEARNED AR SUBMITTED THAT THE ASSESS EE, BEING A FREELANCING PHOTOGRAPHER , CANNOT EXPECT THAT ALL HIS PHOTOGRAPHS WILL GENERATE INCOME. HE SUBMITTED THAT THE ASSESSEE IS CONSTRAINED TO INCUR ROUTINE EXPENSES IN ORDER TO MAINTAIN HIS PROFESSION , EVEN IF IT DOES NOT GENERATE INCOME . ACCORDINGLY HE SUBMITTED THAT THE DISALLOWANCE S CONFIR MED BY LEARNED CIT(A) WAS NOT JUSTIFIED. 5. ON THE CONTRARY, LEAR NED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE EXPENDITURE CLAIMED BY THE ASSESSEE IS DISPROPORTIONATE TO THE INCOME DECLARED BY HIM AND HENCE LEARNED CIT(A) WAS JUSTIFIED IN CONFIRMING THE DISALLOWANCE. 6. WE HAVE NOTICED FROM THE DETAILS OF EXPENSES THAT THE ASSESSEE HAS CLAIMED A SUM OF RS. 2.28 LAKHS TOWARDS DEPRECIATION. A PERUSAL OF THE DEPRECIATION SCHEDULE ATTACHED IN THE PAPER BOOK WOULD SHOW THAT MOST OF THE ASSETS, EXCEPT MOT ORCARS , ARE RELATED TO THE PROFESSION OF THE ASSESSEE. FURTHER THERE IS MERIT IN THE CONTENTION S OF THE ASSESSEE THAT THE ASSESSEE IS REQUIRED TO INCUR THE EXPENSES IN ORDER TO MAINTAIN HIS PROFESSION , EVEN IF THE PHOTOGRAPHS TOOK BY HIM DID NOT FETCH THE REVENUE. AT THE SAME TIME, WE NOTICED THAT THE ASSESSEE FAILED TO JUSTIFY CERTAIN EXPENSES LIKE TRAVELLING, TELEPHONE, BUSINESS MEETING ETC. IN RESPECT OF CAR EXPENSES AND TELEPHONE EXPENSES, ONE CAN NOT RULE OUT , THAT A PART OF THEM WERE NOT INCURRED FOR P ERSONAL PURPOSES . UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT IT WOULD BE JUSTIFIABLE IF A PART OF EXPENSES IS DISALLOWED INSTEAD OF DISALLOWING THE ENTIRE EXPENDITURE CLAIMED BY THE ASSESSEE. HENCE, ON A CONSPECTUS OF THE MR. MUKESH INDRAJIT MUNIM 3 MATTER, WE ARE OF THE VIEW THAT THIS ISSUE COULD BE ADDRESSED BY DISALLOWING A SUM OF RS.1 .00 LAKH ON ADHOC BASIS , WHICH IN OUR VIEW, WILL TAKE CARE OF PERSONAL ELEMENT S AND NON BUSINESS PURPOSE S INVOLVED IN THE EXPENSES CLAIMED BY THE ASSESSEE. ACCORDINGLY WE SET ASIDE THE ORDER O F LEARNED CIT(A) AND DIRECT THE ASSESSING OFFICER TO SUSTAIN THE DISALLOWANCE TO THE EXTENT OF RS. 1.00 LAKH. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER HAS BEEN PRONOU NCED IN THE OPEN COURT ON 20 .5 .2016 . SD/ - SD/ - (AMIT SHUKLA ) (B.R.BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 20 / 5 /20 1 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C IT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI PS