ITO 8(2)(3), MUMBAI V. MAGIC HOLDING P.LTD, MUMBAI

ITA 125/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88677 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 31-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 03-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAWAN KUMAR BEERLA DR

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.125/MUM/2013 ASSESSMENT YEAR: 2009-10 ! / REVENUE BY SHRI PAWAN KUMAR BEERLA- DR '#$ % / ASSESSEE BY NONE & !' ( % ) / DATE OF HEARING : 31/03/2015 ( % ) / DATE OF ORDER: 01/04/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 05/10/2012, OF THE LD. FIRST APPELLATE AUTHOR ITY, I.T.O.-8(2)(3) ROOM NO.213, 2 ND FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 / VS. M/S MAGIC HOLDINGS PVT. LTD. SAGAR AVENUE, S V ROAD, OPP. SHOPPERS STOP, ANDHERI (W), MUMBAI-400058 ( ! / REVENUE) ( '#$ % /ASSESSEE) P.A. NO.AACCM3786C M/S MAGIC HOLDINGS PVT. LTD 2 MUMBAI. THE FIRST GROUND RAISED IS THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELET ING THE DISALLOWANCE OF REPAIRS AND MAINTENANCE OF RS.3,49,776/- WITHOUT APPRECIATING THE FACT THAT AS SESSEE DID NOT PROVE THAT THE SAID EXPENDITURE WAS ACTUALL Y INCURRED. 2. DURING HEARING OF THIS APPEAL, THE LD. DR, SHRI PAWAN KUMAR BEERLA, DEFENDED THE CONCLUSION ARRIVED AT IN THE ASSESSMENT ORDER BY ADVANCING HIS ARGUMENTS WHICH IS IDENTICAL TO THE GROUND RAISED. NOBODY WAS PRESENT FOR THE ASSESSEE IN SPITE OF ISSUANCE OF RE GISTERED AD NOTICE, THEREFORE, WE HAVE NO OPTION BUT TO PROC EED EX-PARTY QUA THE ASSESSEE AND TEND TO DISPOSE OFF T HIS APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD . 2.1. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. DR A ND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT THE ASSESSEE DEBITED RS.3,49,776/- ON ACCOUNT OF RE PAIR AND MAINTENANCE OF FURNITURE. THE ASSESSEE ALSO EN TERED INTO AN AGREEMENT WITH METRO SHOES LTD., WHEREIN, M INOR REPAIRS WERE TO BE BORNE BY M/S METRO SHOES LTD. T HE LD. ASSESSING OFFICER WAS OF THE VIEW THAT SINCE TH E IMPUGNED EXPENDITURE WAS MINOR, THEREFORE, IT WAS T O BE BORNE OUT BY THE ASSESSEE, CONSEQUENTLY, DISALLOWED THE SAME. ON APPEAL, BEFORE THE LD. COMMISSIONER OF INC OME TAX (APPEALS), THE LEDGER ACCOUNT OF THE PARTIES FR OM WHOM TEAK WOOD, PLY WOOD TOUGHEN GLASSES WERE PURCHASED, THE INVOICE AMOUNTING TO RS.2,50,070/- W AS M/S MAGIC HOLDINGS PVT. LTD 3 FURNISHED. THE ASSESSEE ALSO PAID RS.99,706/- AS L ABOUR CHARGES WHICH WERE INCURRED BY THE ASSESSEE AT THE INSTANCE OF M/S METRO SHOES. THE AGREEMENT BETWEEN THE PARTIES WAS ALSO EXAMINED BY THE COMMISSIONER O F INCOME TAX (APPEALS). IT WAS FOUND THAT THE AMOUNT S WERE PAID BY CHEQUE. AS PER THE AGREEMENT, THE ASS ESSEE WAS TO BEAR THE COST OF MAJOR REPAIRS. UNCONTROVER TED FINDING IS THAT THE EXPENSES WERE INCURRED FOR BUSI NESS PURPOSES, THUS, WE FIND NO INFIRMITY IN THE CONCLUS ION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) AS THE EXPENSES WERE ACTUALLY INCURRED FOR BUSINESS PURPOSES. 3. THE NEXT GROUND PERTAINS TO DISALLOWANCE OF SALA RIES OF RS.9,60,000/- WITH RESPECT TO PAID TO OTHER STAF F AND INCURRED WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOS ES. THE LD. DR, DEFENDED THE CONCLUSION ARRIVED AT IN T HE ASSESSMENT ORDER AND ADVANCED THE ARGUMENTS IDENTIC AL TO THE GROUND RAISED. 3.1. WE NOTE THAT AS PER THE AGREEMENT WITH M/S MET RO SHOES LTD. (CLAUSE-22) THE SELLING STAFF WAS TO BE APPOINTED BY METRO SHOES. THE ASSESSING OFFICER DISALLOWED THE EXPENDITURE OF THE IMPUGNED AMOUNT WHICH WAS PAID TOWARDS SALARY TO THE STAFF, UNDISPU TEDLY, AS PER CLAUSE-22, THE M/S METRO SHOES WAS TO MAINTA IN THE SELLING STAFF, WHEREAS THE OTHER CLERICAL STAFF , SUPERVISORY STAFF, DRIVER AND SECURITY, ETC. WERE T O BE APPOINTED AND PAID BY THE ASSESSEE FOR WHICH THE M/S MAGIC HOLDINGS PVT. LTD 4 ASSESSEE INCURRED THE EXPENSES FOR BUSINESS PURPOSE S. WE FIND NO INFIRMITY IN THE CONCLUSION OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). IT IS AFFIRM ED. 4. THE LAST GROUND PERTAINS TO PACKING EXPENSES OF RS.2,48,337/-. THE STAND OF THE LD. DR, IS THAT WH ILE COMING TO A PARTICULAR CONCLUSION, THE LD. COMMISSI ONER OF INCOME TAX (APPEALS) DID NOT APPRECIATE THE FACT THAT THE IMPUGNED EXPENDITURE WAS NOT INCURRED WHOLLY AN D EXCLUSIVELY FOR BUSINESS PURPOSES. 4.1. WE HAVE PERUSED THE RECORD AND CONSIDERED THE ARGUMENTS ADVANCED BY THE LD. DR. THE LD. ASSESSIN G OFFICER DISALLOWED THE AMOUNT WHICH WAS INCURRED FO R PACKING OF MATERIAL, SIGNBOARDS, AND CARRY BAGS, ET C. IT WAS FOUND BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) THAT AS PER CLAUSE-24, THE ASSESSEE WAS T O DISTRIBUTE FANCY PACKING MATERIALS TO SAFEGUARD THE BUSINESS INTEREST AT ITS OWN COST. THIS FACTUAL MA TRIX WAS NOT CONTROVERTED/CONSIDERED BY THE REVENUE. THE ASSESSEE WAS BOUND TO PERFORM THE TERMS AND CONDITI ONS MENTIONED IN THE RETAIL AGENCY AGREEMENT WITH M/S M ETRO SHOES LTD. THE EXPENSES WERE ACTUALLY INCURRED FOR BUSINESS PURPOSES WHOLLY AND EXCLUSIVELY. IN VIEW O F THESE FACTS, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). I T IS AFFIRMED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. M/S MAGIC HOLDINGS PVT. LTD 5 THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. DR, AT THE CONCLUSION OF THE HEARIN G ON 31/03/2015. ,- ( ./0 12 31 /0 3 /2015 ( ' 7 SD/ - (N.K. BILLAIYA) SD/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $ # / JUDICIAL MEMBER & ' MUMBAI; 1 DATED : 01/04/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. 89:; / THE APPELLANT 2. <=:; / THE RESPONDENT. 3. , , & >% ( 89 ) / THE CIT, MUMBAI. P4. , , & >% / CIT(A)- , MUMBAI 5. @!A <%' , , 89) 8' 0 , & ' / DR, ITAT, MUMBAI 6. B# C' / GUARD FILE. / BY ORDER, =@9% <% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , & ' / ITAT, MUMBAI