MEGHA PROPERTY DEVELOPERS PRIVATE LIMITED, MUMBAI V. INCOME TAX OFFICER, WARD 4(2)(4), MUMBAI

ITA 1919/MUM/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6678 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 26-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Assessee Lawyers: P RIYANKA JAIN
• Keywords: Reopening of assessment; Audit objection

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI C.N. PRASAD , JM ITA NO. 1919 / MUM/20 18 ( ASSESSMENT YEAR : 2008 - 09 ) M/S. MEGHA PORPERTY DEVELOPERS PVT. LTD., 701 - A, NIRANJAN BUILDING 99, MARINE DRIVE MUMBA I 400 002 VS. INCOME TAX OFFICER, WARD 4(2)(4) ROOM NO.647, AAYAKAR BHAVAN, M.K. ROAD PAN/GIR NO. AAFFM5593B APPELLANT ) .. RESPONDENT ) ASSESSEE BY MS. PRIYANKA JAIN REVENUE BY MS. N. HEMALATHA DATE OF HEARING 31 / 05 /201 8 DATE OF PRONOUNCEMENT 28 / 06 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 9, MUMBAI DATED 06/06/2016 FOR A.Y.2008 - 09 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S. 147 OF T HE INCOME TAX ACT, 1961. 2. IN THIS APPEAL ASSESSEE IS AGGRIEVED BY THE ACTION OF CIT(A) UPHOLDING REOPENING OF ASSESSMENT U/S.147. ASSESSEE IS ALSO AGGRIEVED FOR DISALLOWANCE OF EXPENDITURE OF RS.6,47,483/ - . 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECO RD PERUSED. 4. FACTS IN BRIEF ARE THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOPMENT. ON THE BASIS OF AUDIT OBJECTION, AO REOPENED ASSESSMENT BY ISSUE OF NOTICE U/S.148. DURING THE COURSE OF RE - ITA NO. 1919/MUM/2018 M/S. MEGHA PROPERTY DEVELOPERS 2 ASSESSMENT PROCEEDINGS, AO DISALLOWED EXPENDI TURE U/S. 3 7(1). EXPENDITURE SO INCURRED WAS NECESSARY FOR BUSINESS AND ASSESSEE HAS SUBMITTED A BRIEF NOTE ON EACH PAYMENT. ASSESSEE HAS INCURRED SOCIETY FORMATION EXPENSES. AFTER SELLING OF FLATS IT IS STATUTORILY LIABILITY OF ASSESSEE TO FORM SOCIETY AS PER MOFA, ACT. THEREFORE, ASSESSEE PAID RS.1,23,000/ - TO MR. RAMRAJA D SASANE TOWARDS HIS FEES FOR COLLECTING INFORMATION DETAILS OF ALL THE PROMOTER MEMBERS OF THE SOCIETY AND FILLING AND FOLLOWING THE PROCEDURE WITH THE REGISTRAR FOR REGISTERING THE NAM E OF THE SOCIETY AND THEIR AFTER FORMATION OF MADHRRI CO - OP HOUSING SOCIETY, (LEDGER ACCOUNT OF SOCIETY FORMATION EXPENSES, VISITING CARD OF CONSULTANT, BILLS AND PAN CARD ARE PLACED AT PAGE NO.56 - 59). HENCE, EXPENSES WAS WHOLLY AND EXCLUSIVELY FOR THE BUS INESS PURPOSE. ASSESSEE HAS ALSO INCURRED TRANSPORT EXPENDITURE OF RS.60,350/ - . THE AO OBSERVED THAT ASSESSEE HAS NOT FILED DETAILS OF TRANSPORTATION EXPENDITURE SO INCURRED. WE FOUND THAT ASSESSEE HAS FILED VOUCHERS FOR THE PAYMENT OF TRANSPORTATION CHARG ES. OUT OF THE EXPENDITURE SO PAID, WE FOUND THAT NO SUPPORTING DOCUMENT WAS FILED IN RESPECT OF TEMPO CHARGES OF RS.350/ - , ACCORDINGLY, WE RESTRICT THE DISALLOWANCE TO THE EXTENT OF RS.350/ - . ASSESSEE HAS ALSO INCURRED EXPENDITURE OF RS.1,12,349/ - ON ACCO UNT OF MEDICAL INSURANCE. OUT OF WHICH RS.48,078/ - WAS ON ACCOUNT OF MEDICAL INSURANCE PREMIUM, RS.8,955/ - ON ACCOUNT OF CAR INSURANCE OF TATA INDIGO AND RS.13,124/ - ON ACCOUNT OF INSURANCE OF MARUTI BALLENO. ASSESSEE HAS ALSO PAID FIRE INSURANCE PREMIUM F OR INSURANCE OF BUILDING AMOUNTING TO ITA NO. 1919/MUM/2018 M/S. MEGHA PROPERTY DEVELOPERS 3 RS.13,928/ - AND ALSO FIRE INSURANCE OF BUILDING AT MADHURI AMOUNTING TO RS.18,099/ - AND RS.10,165/ - ON ACCOUNT OF INSURANCE PREMIUM. FROM THE RECORD, WE FOUND THAT EXPENSES WERE INCURRED FOR INSURING THE BUSINESS FIXE D ASSETS AND UNSOLD PREMISES. A) RS.48,078/ - IS PAID TO NEW INDIA INSURANCE COMPANY. B) RS.13,124/ - INSURANCE PREMIUM FOR CAR MARUTI BALENO PAID TO NEW INDIA INSURANCE COMPANY. C) RS.8,955/ - INSURANCE PREMIUM FOR CAR TATA INDIGO RS. 13926/ - INSURA NCE PREMIUM FOR FIRE AND SPECIAL PERILS FOR PROJECT MADHURI, AIROLI TO BAJAJ ALIANZ GENERAL INSURANCE. D) RS,18,099/ - INSURANCE PREMIUM PAID TO TATA A1G FOR MADHURI PROJECT, AIROLI 5. SO FAR AS LEGAL AND PROFESSIONAL EXPENDITURE ARE INCURRED, WE FOUND THAT SAME WAS PAID TO ADVOCATES AND CONSULTANTS TO PRESERVE THE ASSETS OF THE COMPANY AND THEREFORE, ALLOWABLE U/S.37(1). FROM THE RECORD WE FOUND THAT T HE ASSESSEE COMPANY HAS DEDUCTED 10% TAX AND CHALLANS FOR SAME WA S PRODUCED BEFORE AO AND PLACED AT PG. NO. 72 OF PAPER BOOK FOR FOUR PARTIES: - SR. NO. PARTY NAME AMOUNT IN RS. TDS 10% CESS 1 KANGA & CO. 25000 2500 7 5 2 K.S. SALIAN 2400 0 2400 72 3 SHAYMKUMAR 30000 3000 90 4 Y.L DATAR 20000 2000 60 TOTAL 99000 9900 297 ITA NO. 1919/MUM/2018 M/S. MEGHA PROPERTY DEVELOPERS 4 6. THUS, TDS HAS BEEN DEDUCTED AND PAID BY TAX CHALLANS FOR THE ABOVE MENTIONED PARTIES ON 1 ST MARCH,2008 OF RS.10,197/ - (9900+297) WHICH IS BEFORE DUE DATE OF FILING RETURN . 7. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY JUSTIFICATION FOR THE DISALLOWANCE OF EXPENDITURE EXCEPT EXPENSES PAID ON ACCOUNT OF TEMPO CHARGES WHICH WAS NOT SUPPORTED BY ANY VOUCHERS. SO FAR AS REOPENING IS CONCERNED, WE FOUND THAT THERE WAS SUFFICIENT REASON BEFORE THE AO TO BELIEVE THAT INCOME HAS ESCAPED INCOME, ACCORDINGLY, THERE I S NO INFIRMITY IN THE REOPENING OF ASSESSMENT. 8. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 / 06 /201 8 SD/ - ( C.N. PRASAD) SD/ - (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 28 / 06 /201 8 KARUNA SR. 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//