MAHESH J ANANDPARA, MUMBAI V. ITO 11(3)(1), MUMBAI

ITA 1571/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3402 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 06-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'SMC' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT ITA NO. 1571/MUM/2014 (ASSESSMENT YEAR: 2005-06) SHRI MAHESH J. ANANDPARA INCOME TAX OFFICER-11(3)( 1) GOBIND CHHAYA CHS PREM NAGAR NO.7, SHOP NO. 12 OFF MANDAPESHWAR ROAD BORIVALI WEST, MUMBAI 400092 VS. AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400020 PAN - AABPA5874F APPELLANT RESPONDENT APPELLANT BY: SHRI BHUPENDRA SHAH RESPONDENT BY: SHRI JAVED AKHTAR DATE OF HEARING: 04.06.2014 DATE OF PRONOUNCEMENT: 04.06.2014 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) 2, MUMBAI AND IT PERTAINS TO A.Y. 2005-06. 2. FOLLOWING ADDITIONS/DISALLOWANCES WERE CHALLENGED B EFORE THE TRIBUNAL: - 1 RESIDENTIAL TELEPHONE EXPENSES (50% OF THE TOTAL BILL) ` 4035/- 2 RESIDENTIAL ELECTRICITY BILL ` 11,129/- 3 ENTERTAINMENT EXPENDITURE (TOTAL CLAIM ` 57,706/-) ` 10,000/- 4 50% OF THE INTEREST PAID ON LOANS BORROWED ` 1,01,359/- 3. AT THE TIME OF HEARING, WITH REGARD TO THE FIRST TH REE DISALLOWANCES, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE BEING A CHARTERED ACCOUNTANT BY PROFESSION IS REQUIRED TO U SE RESIDENTIAL TELEPHONE AND ALSO PART OF THE RESIDENTIAL ELECTRICITY BILL W AS MEANT FOR STUDY OF FILES AT HOME. HOWEVER, WHEN IT WAS POINTED OUT THAT THE LEA RNED CIT(A) WAS VERY CONSIDERATE IN NOT TAKING INTO CONSIDERATION THE OF FICE TELEPHONE/MOBILE ITA NO. 1571/MUM/2014 SHRI MAHESH J. ANANDPARA 2 PHONE BILLS AND ONLY 50% OF THE RESIDENTIAL TELEPHO NE EXPENSES WAS DISALLOWED, RESIDENTIAL ELECTRICITY BILL IS EXCLUSI VELY MEANT FOR RESIDENCE AND FOR ENTERTAINMENT, NO EVIDENCES WERE PRODUCED TO PR OVE THE NATURE OF EXPENDITURE, THE LEARNED COUNSEL FOR THE ASSESSEE D ID NOT SERIOUSLY PRESS THIS GROUND. ACCORDINGLY GROUND NO. 1 WITH REGARD T O VALIDITY OF CONFIRMATION OF ADDITION OF ` 25,164/- IS HEREBY REJECTED. 4. WITH REGARD TO GROUND NO. 2 THE ASSESSEE CONTENDED THAT THERE IS NO BASIS FOR DISALLOWANCE OF 50% OF THE INTEREST PAID ON LOANS BORROWED BY ASSUMING THAT THE LOANS WERE UTILISED FOR NON-PROFE SSIONAL PURPOSES. THE LEARNED CIT(A) OBSERVED THAT SIMILAR DISALLOWANCE W AS MADE IN THE IMMEDIATELY PRECEDING YEAR AND THEREFORE HE CONFIRM ED THE DISALLOWANCE MADE BY THE AO. 5. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE PLACED BEFORE THE BENCH A COPY OF THE ORDER OF THE ITAT D BENCH, MUMBAI IN ASSESSEES OWN CASE FOR A.Y. 2004-05 TO SUBMIT THAT THE ADHOC DISALLOWANCE WAS SET ASIDE BY THE TRIBUNAL SINCE EVEN IN THE REM AND REPORT FILED BY THE AO IT WAS ADMITTED BY HIM THAT IT WAS DIFFICULT TO VERIFY ALL THE DETAILS TO MAKE OUT A CASE THAT INTEREST BEARING FUNDS WERE UT ILISED FOR NON-BUSINESS PURPOSES. IT IS NOT IN DISPUTE THAT THE FACTS ARE I DENTICAL IN THIS YEAR ALSO. 6. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE I AM OF THE VIEW THAT FOR THE REASONS STATED BY THE ITAT IN ASSESSEES OW N CASE FOR A.Y. 2004-05 THE ADDITION MADE IN THIS YEAR ALSO DESERVES TO BE SET ASIDE AND DIRECT ACCORDINGLY. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH JUNE, 2014. SD/- (D. MANMOHAN) VICE PRESIDENT MUMBAI, DATED: 4 TH JUNE, 2014 ITA NO. 1571/MUM/2014 SHRI MAHESH J. ANANDPARA 3 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 2, MUMBAI 4. THE CIT 1, MUMBAI CITY 5. THE DR, SMC BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.