SATISH KUMAR MEHRA, MUMBAI V. ITO WD 8(3)(2), MUMBAI

ITA 1400/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8399 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 18-01-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 19-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B S BIST
• Section: 143(3)

Judgement Text

SATISH KUMAR MEHRA ITA NO.1400/M/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH E,MUM BAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.1400/MUM/2013 (ASSESSMENT YEAR- 2009-10) SATISH KUMAR MEHRA, 6,RAVI KIRAN ESTATE , ANDHERI (W) MUMBAI-400053 PAN: AKKPM1432G VS. INCOME TAX OFFICER -8(3)(2) MUMBAI- 400020 (APPELLANT) (RESPONDENT) ASSESSEE BY : HARI RAHEJA -AR REVENUE BY : SHRI B.S. BIST (DR) DATE OF HEARING : 24.01.2017 DATE OF PRONOUNCEMENT : 01.03.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY ASSESSEE UNDER SECTION 253 OF THE IN COME-TAX ACT (THE ACT) IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF I NCOME-TAX (APPEALS) [FOR SHORT THE CIT(A)] 18, MUMBAI DATED 18.12.2012 FOR ASSES SMENT YEAR (AY) 2009-10. THE ASSESSEE HAS RAISED AS MANY AS 9 GROUNDS OF AP PEAL , HOWEVER AS PER OUR CONSIDERED OPINION ONLY 2 SUBSTANTIALLY GROUND OF A PPEAL EMERGES FROM THE GROUNDS OF APPEAL FILED BEFORE THE TRIBUNAL WHICH A RE SUMMARIZED AS UNDER; (I) IF LEARNED COMMISSIONER (APPEALS) ERRED IN CONFIRMI NG THE DISALLOWANCE OF PROFESSIONAL FEES OF RS.22,425/-. (II) IF LEARNED COMMISSIONER (APPEALS) ERRED IN CONFIRMI NG THE DISALLOWANCE OF INTEREST OF RS. 1,50,000/- 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED RET URN OF INCOME FOR RELEVANT ASSESSMENT YEAR ON 30 SEPTEMBER 2008 DECLARING TOTA L INCOME OF RS.15,56.460/- . THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) O N 29 DECEMBER 2011. THE SATISH KUMAR MEHRA ITA NO.1400/M/2013 2 ASSESSING OFFICER WHILE PASSING ASSESSMENT ORDER D ISALLOWED THE PROFESSIONAL FEES OF RS. 22,425/- AND FURTHER DISALLOWED A SUM O F RS. 1,50,000/- OUT OF TOTAL INTEREST DEBITED TO P/L ACCOUNT OF RS. 6,42,192/- PAID TO HDFC BANK. ON APPEAL BEFORE COMMISSIONER (APPEALS) BOTH THE DISALLOWANCE WAS SUSTAINED. HENCE, AGGRIEVED BY THE ORDER OF COMMISSIONER (APPEALS) TH E ASSESSEE HAS FILED PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD LD AR OF THE ASSESSEE AND LEARNED DR FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FIRST GROUND OF A PPEAL RELATES TO DISALLOWANCE OF PROFESSIONAL EXPENSES OF RS. 22,425/-. THE LEARNED AND AR OF THE ASSESSEE ARGUED THAT ASSESSEE WAS NOT GIVEN SUFFICIENT AND ADEQUATE OPPORTUNITY BY ASSESSING OFFICER AS WELL AS BY LD COMMISSIONER (APPEALS). TH E LD AR ARGUED THAT EXPANSES OF PROFESSIONAL FEE ARE ALLOWABLE EXPENSES. ON THE OTHER HAND THE LD DR FOR THE REVENUE ARGUED THAT ASSESSEE HAS NOT FURNISHED ANY EVIDENCE IN SUPPORT OF SUCH CLAIM. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF LD REPR ESENTATIVES OF THE PARTIES THE ASSESSING OFFICER WHILE FRAMING ASSESSMENT DISA LLOWED THE PROFESSIONAL FEES OF RS. 22,425/- HOLDING THAT NO PROOF IN SUPPORT OF CLAIM IS FILED BY ASSESSEE. THE LD CIT(A) ALSO CONFIRMED THE DISALLOWANCE ON SIMILA R LINES. WE ARE ALSO UNABLE TO FIND OUT ANY DOCUMENTARY EVIDENCE IN THE E PAPER BO OK FILED BEFORE US. THE LD AR OF THE ASSESSEE HAS NOT EXPLAINED, TO WHOM SUCH PAY MENTS OF PROFESSIONAL FEE WAS PAID. THE LD AR OF THE ASSESSEE FAILED TO DISCHARGE THE ONUS LIES UPON HIM. THUS, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF AUTHORITIES BELOW. HENCE, THIS GROUND OF APPEAL IS DISMISSED. 5. GROUND NO. 2 RELATES TO DISALLOWANCE OF RS. 1,50,00 0/- ON ACCOUNT OF INTEREST EXPENSES. THE LD AR FOR THE ASSESSEE ARGUED THAT T HE ASSESSEE HAS SHOWN SUFFICIENT EVIDENCES THAT THE ASSESSEE OWNED SUFFIC IENT INTEREST-FREE FUNDS AVAILABLE WITH HIM AND NO INTEREST DISALLOWANCE WAS WARRANTED AGAINST THE ASSESSEE. IN SUPPORT OF ITS SUBMISSION THE LD AR OF THE ASSESSEE RELIED ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN RELIANCE U TILITY SERVICES PRIVATE SATISH KUMAR MEHRA ITA NO.1400/M/2013 3 LIMITED. ON THE OTHER HAND THE LD DR FOR THE REVENU E SUPPORTED THE ORDERS OF AUTHORITIES BELOW. THE LEARNED DR FOR REVENUE PRAYE D FOR DISMISSAL OF THE APPEAL. 6. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND FURTHER GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. FOR FAR AS THE INT EREST DISALLOWANCE IS CONCERNED THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS GIV EN INTEREST-FREE LOANS TO VARIOUS PERSONS. THE ASSESSING OFFICER NOTED THAT THE ASSES SEE HAS DEBITED A SUM OF RS.6,42,192/- FROM PROFIT AND LOSS ACCOUNT AS INT EREST. THE ASSESSEE HAS GIVEN INTEREST FREE LOAN TO VARIOUS PARTIES, THUS THE ASS ESSING OFFICER DISALLOWED A SUM OF RS. 1,50,000/- ON AD HOC BASIS. THE LEARNED COMMISS IONER (APPEALS) CONFIRMED BOTH THE DISALLOWANCE IS HOLDING THAT THE ONUS WAS UPON ASSESSEE TO PROVE THE NECESSARY FACTS IN ORDER TO CLAIM AND A DEDUCTION. WE HAVE PERUSED THE BALANCE SHEET OF THE ASSESSEE AS ON 31.03.2009 THE ASSESSEE OWNED AS SUM OF RS. 8,593,837.90/- IN HIS CAPITAL ACCOUNT , THE ASSESSE E HAS INVESTED ONLY AS SUM OF RS.47,76,278/- IN SHARE AND SECURITIES. THUS, AS P ER THE DECISION OF HONBLE BOMBAY HIGH COURT IN CIT VS RELIANCE UTILITIES 313 ITR 340(BOM) , WHERE AN ASSESSEE HAS HIS OWN FUNDS AS WELL AS BORROWED FUND S, A PRESUMPTION CAN BE MADE THAT THE ADVANCES FOR NON-BUSINESS PURPOSES HAVE BE EN MADE OUT OF THE OWN FUNDS AND THAT THE BORROWED FUNDS HAVE NOT BEEN USED FOR THIS PURPOSE. ACCORDINGLY, THE DISALLOWANCE OF THE INTEREST ON THE BORROWED FUNDS IS NOT JUSTIFIED. HENCE , THIS GROUND OF APPEAL IS ALLOWED. 7. HENCE, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 1 ST MARCH, 2017. SD/- S SD/- (B.R. BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 01/03/2017 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/